What to do when you overdraft

Here’s what happens when you spend more than you have in your checking account — plus tips to avoid doing it.

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It can happen to anyone: You may eventually find yourself with a negative balance in your bank account from overspending.

When a transaction clears, and you don’t have the balance to cover the total charge, you overdraw your account. This leaves you with a negative balance and is known as an overdraft.

What happens to your account when you overdraft?

Overdrafts occur when you spend more money than you have in your checking account and the bank pays your transaction. The bank, at its discretion, may authorize and pay overdrafts for checks, automatic bill payments (such as recurring debit card and ACH payments) and other transactions made using your checking account number.

Wells Fargo will not authorize and pay overdrafts for your ATM and everyday (one time) debit card transactions if you don’t have enough money, unless you ask us to by adding Debit Card Overdraft Service to your account. If you add the optional Debit Card Overdraft Service to your checking account, the bank may approve (at our discretion) these transactions if you don’t have enough money in your checking account or accounts linked for Overdraft Protection at the time of the transaction.

If you do overdraft, we will charge you a fee of $35 each time we pay an overdraft item to your account1, with a limit of three fees per day.

How to avoid overdrafting your account

There are precautions you can take to prevent overdrafts and avoid fees. The easiest approach? Keep a budget, track your spending, and don’t spend more than you have available.

But still, sometimes overdrafts happen, even when you closely monitor your money. For example, you could accidentally set up an automatic payment and schedule it before a check you deposited clears into your account. Here are some tips to help avoid overdrafting.

1. Know your bill due dates. If possible, try to time bill payments to be after paydays, or when you’ll expect to see money in your account. You can also adjust your bill due dates: Many lenders will let you change what day of the month your payment is due. For example, if you know you get paid consistently on the 15th of the month but your car payment is due on the 14th, give your lender a call and ask for the due date to be pushed to the 16th of each month.

2. Know when you’re getting paid. If you get paid every Friday, it’s pretty easy to track. But if you have an inconsistent paycheck, or your paycheck will be delayed due to a holiday, you may go a couple of weeks without pay (and your balance may get a little low).

3. Set up direct deposit. Have your payroll or benefit checks automatically deposited into your account — it is safe, easy, and you will have immediate access to your money.

You’ll also get the benefit of the Overdraft RewindSM feature. With the Overdraft Rewind feature, when a covering ACH direct deposit is received by 9:00 a.m. we will automatically reevaluate transactions from the previous business day that resulted in an overdraft or returned item (non-sufficient funds/NSF) and reverse overdraft or returned item decisions and waive associated fees.2

4. Get in the habit of checking your bank account regularly. With our online banking and mobile banking app, it’s easier than ever to keep tabs on what is in your account.

5. Set up notifications. As a backup to regularly checking your account, sign up to receive timely alerts — either emails or text messages6 — when your account dips below a certain amount that you specify. If you opt for text alerts, messaging rates from your carrier may apply.

6. If you can, leave a small cash cushion in your account. This way, even if you set up automatic bill payments before your next paycheck, you won’t run the risk of an overdraft.

7. Have a protection plan. Set up Overdraft Protection, which allows you to link your eligible Wells Fargo savings account3 to your checking account. Then the bank will use available funds from the linked account to authorize your transactions if you don’t have enough money in your checking account. You’ll incur a single daily fee of $12.50 when a transfer is made4 regardless of the number of transactions that the transfer covers, which is less than an overdraft fee of $35 per overdrafted transaction.

How overdraft services work for a debit card purchase

What would happen if you made a $150 purchase with your debit card when you only had $100 in your Wells Fargo checking account?

The table below shows the outcome of the transaction depending on whether you have linked your savings account for Overdraft Protection or added Debit Card Overdraft Service to your account.

When there is not enough money in my checking account to cover transactions… …I prefer to have the transactions declined. …I prefer to use the money in other accounts to allow the transactions. …I prefer that the bank may approve the transactions and overdraw my account.
  No overdraft services Linked savings account for Overdraft Protection Enrolled in Debit Card Overdraft Service
Transaction is: Declined at the time of purchase Approved Approved or Declined at the bank’s discretion
    If a covering transfer or deposit5 is made by the posted cut-off time on the same business day no transfers are made and no fees are assessed
Funds transfers None $62.50 is transferred from the linked savings account ($50 to cover the transaction, plus the transfer fee) None
Fees None $12.50 Overdraft protection fee charged to the checking account $35 Overdraft fee charged to the checking account (if the transaction is approved and paid into overdraft)