Matt Benevento was surprised when his bank sent him an alert that he’d incurred four overdraft transactions in his account and gotten dinged more than $100 in overdraft fees.
“It seemed like they were charging me so much money for a one-time mistake,” he says. But Benevento, a search engine optimization strategist who was living in New York state at the time, had been with his bank for years and wondered if it might be lenient with him. He says he called the bank’s customer service line and asked if they could waive the fees.
It worked. “They allowed the refund because it was my first offense and because I’m generally a good customer,” Benevento says. His advice to anyone else who’s been charged an overdraft fee? Ask if the bank will waive some or all of it. “It never hurts to ask,” he says.
How to ask your bank for a refund
Some banks have published fee forgiveness policies and may automatically waive some overdraft fees based on certain conditions. But even if there’s no formal policy, it’s always worth asking if your bank will waive the fee, says Jesse Bradin, a financial advisor in Raleigh, North Carolina.
“You have to be your own best advocate,” Bradin says. Call the customer service line, explain that you have an overdraft charge and ask if the fee can be waived, he says. It can be as simple as that.
If your fees get refunded, you’ll still need to make a deposit into your account to cover the negative transaction.
Understanding overdrafts
Overdraft fees are charged when a customer is enrolled in overdraft protection, giving their bank or credit union permission to process a transaction even when there isn’t enough money in the bank account to cover it. The institution typically charges a fee for this service. Many large banks charge $36 or more per transaction — sometimes multiple times a day — which sends the account balance further into negative territory. The costs add up.
Overdraft protection for debit card purchases and ATM transactions is optional. Opting out means that your transaction will be declined if there’s not enough money in your account to cover it. This can be inconvenient, but it could also save you the expense of multiple overdraft charges.
Banks earn billions of dollars a year in overdraft fees. The largest banks collected more than $11 billion in overdraft fees in 2019, according to the Center for Responsible Lending. With overdraft fees, customers end up owing a lot of money to their bank at a time when they’re least likely to be able to afford it, Bradin says.
Overdrafts may be a big moneymaker for banks, but they don’t have to be a money-loser for you. If you’re charged an overdraft, ask for a refund of those fees. It can be a quick way to get your account balance back on track so you can focus on avoiding or minimizing those charges in the future.