What are overdraft fees?

Answer:
When someone overdraws his or her bank account,

it is called an overdraft. Often when this happens, an overdraft fee is charged. Banks charge an overdraft fee when the account has a negative balance because the customer has withdrawn or written checks for more money than was present in the account.

Overdraft fees can be expensive and add up quickly, as they are charged for each transaction made when there is a negative balance. To avoid overdraft fees, it is important for customers to balance their checkbook and not trust the available balance listed on the account, as some transactions may take longer to clear than others.


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