How to get overdraft fees refunded | Roost
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How to get overdraft fees refunded

Top 3 ways to get an overdraft fee refunded

Getting hit with a bank overdraft fee is the worst—it’s expensive, stressful, and often, a surprise. While some banks are changing their approach (a Chase overdraft fee, for example, now only happens if you overdraw more than $50), most banks still charge them. With the average fee coming in at a whopping $34, it’s worth putting in some time to learn how to get overdraft fees refunded—and how to avoid them in the first place.

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Top 3 ways to get an overdraft fee refunded

Getting a bank overdraft fee refunded is actually easier than you think. The secret to getting some of your money back? Ask and act quickly.  

1. Request a refund

If you’re generally a good customer and you overdraft only occasionally, call and request a reversal. If you’re respectful and have a good reason why it happened (and why it’s unlikely to happen again), there’s a good chance the customer service representative will say yes. 

Make the call as soon as possible and improve your chances by asking nicely (see our tips below). 🙂

2. Transfer funds from another account

Many banks will allow you to transfer money into your overdrawn account within 24 hours to avoid the overdraft fee. You’re more likely to be able to transfer this money quickly if you already have another account at the same financial institution. (Bank to bank transfers usually take a couple of days.) 

Log into your online banking app and make the transfer and contact customer service at the same time to let them know.

3. Dispute the merchant fee

If you overdraft, it means your transaction goes through despite you not having enough money (and then the bank charges you a fee for fronting you that money). If you’ve opted out of overdraft coverage, then your bank may reject the transaction at your time of purchase and the merchant hits you up for a fee. 

While not technically an overdraft, you may still want to work to get the merchant fee overturned. Give them a call, show up with cash to pay for your purchase, apologize and see if they’ll refund you the fee. 

How to respectfully request an overdraft fee refund

If you’re getting ready to contact your bank to get an overdraft fee refunded, here’s what to do:

1. Make sure you’re in a calm, approachable mindset. Being angry or threatening will get you nowhere; being a reasonable person more likely will.

2. Draft your explanation. Help them understand what happened and what you’re doing to avoid it the next time around. Your goal is to own the fact that you overdrafted and convince the bank that they should overturn it. 

3. Ask to have the fee removed. Explain that you have the funds to cover the original charge and that you are ready to move those funds into the account (if you haven’t already).

4. If you don’t get the answer you’re looking for, ask (respectfully) to speak to a manager. They may need to get supervisor approval so don’t be disappointed if you don’t get an answer immediately.  

How to prevent overdraft fees 

1. Check your balance regularly

Make sure you know how much money is coming and going at all times.  Keep track of it manually on paper or on your phone. Use a bank app for quick balance checks and to monitor your expenses. 

2. Set up alerts for low balances

If your bank offers low-balance alerts, make sure to sign up. Low balance alerts are sent via app notification or by email and help you stay on top of your money when you’re busy living the rest of your life. 

3. Keep on top of auto-repayment plans

Make sure you track any auto-payments you have set up. Auto payments draw directly from your bank account, on a regular cadence. This can be super convenient—as long as you have a steady income and the in and out flow of funds each month is pretty consistent. 

Keep track of which payments are coming out when, and if you struggle repeatedly to have enough funds at the right time, consider turning some of the auto-payments off.  

4. Cancel overdraft protection

This might seem a little counterintuitive at first but stick with us. You’re only charged a bank overdraft fee when you don’t have enough money in your account but the bank covers the charge or purchase anyway. 

Here’s the thing though—overdraft protection is optional. You can opt-out of having the bank cover your transaction. This simply means your transaction will be denied if you try to make a payment with an account that doesn’t have sufficient money. Then you can choose whether to cancel your purchase or use a different payment method.

Lean on other products to avoid overdraft fees

The best way to avoid overdraft fees is to track your spending, manage your monthly budget, and turn off overdraft protection entirely. That said, there are a few banking tools that will help you if you need cash now to cover funds and upcoming withdrawals. Here are a few options to consider:

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Early payday products

Many employers and banks are offering early paycheck access if you have a direct deposit connected with your employer.  Programs like Chime and Varo give you access to your paycheck up to two days early when you link with direct deposit.  

Deposit advance

If your security deposit is stored with a company like Roost, you may be able to use some of that money as an emergency fund. Typically this means you take a small advance on your deposit, which is transferred directly into your checking account. You can get up to $400 without a credit pull and there’s no interest. The other nice thing (at least about Roost!) is that you can pay yourself back over time.  

Use a prepaid debit card

Using a prepaid debit card is a pretty logical way to avoid overdraft fees. With a prepaid debit card, your funds are loaded beforehand, so you can’t really spend beyond what’s loaded onto the card. And without overspending, there are no overdraft fees. 

Link your bank accounts

Another way you can avoid overdraft fees is to link a savings account (or sometimes a line of credit) to your checking account. That way if you don’t have enough money in your checking account to cover a charge, the bank automatically pulls or transfers the funds from the linked savings account. There’s typically some type of cost for these services, but they tend to be less expensive than overdraft fees.

Switch to a bank with better transparency and no overdraft fees 

A growing number of banks and banking apps have moved toward eliminating overdraft fees or providing greater leniency. (Many of these have some type of requirement, though, i.e. that you’ve set up direct deposit or have multiple accounts with the same institution.) 

Some banks offer a safety zone of say $50 or less where they won’t charge or a grace period of up to 48 hours if you pay the money back quickly. Check out Chime, Capital One 360 Checking, Ally Interest Checking, Discover, and Axios, to just name a few.  

As you’re looking around, make sure to read the fine print for what conditions you need to meet to avoid the fees—and make sure it’s realistic for your situation. 

For example, Wells Fargo waives overdraft fees as long as you make a direct deposit by 9 am the next day to cover the charge. With Bank of America’s Balance Connect, you can link to five other accounts and transfer funds when you need to avoid overdraft fees. 

It pays to avoid overdraft fees

Overdraft fees aren’t cheap, ranging from $30-$35 per transaction. Some banks may even charge you several overdraft fees in one day, or if you have a negative balance for multiple days. Fees can add up quickly, taking away from your budget to pay other bills or savings goals. It’s worth your time (and money!) to get ahead of any potential bank overdraft fees. It’s also worth knowing how to get overdraft fees refunded—just in case.

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A quick note! Our goal is to gather and share info that’s up-to-date and helps you make great decisions as a renter. That said, the information you get directly from a provider could be a little different. Make sure to review their terms and conditions directly; and, if you see anything here that needs to be updated, please let us know! Advertising disclosure
Last Updated: September 9th, 2022