DayCents

Overdraft

An overdraft happens when you spend more than your checking balance and the bank covers the difference. It usually triggers a fee — often around $35 per transaction — making it one of the most expensive forms of short-term borrowing in personal finance.

Opting out of overdraft 'protection' means a card transaction is simply declined instead of triggering a fee. A small buffer in checking and low-balance alerts are the cheapest defenses against overdraft charges.