Overdraft.

In plain English

When a payment exceeds your balance, the bank either declines it or covers it for you, and "covers it" is the product called overdraft. Banks may charge a fee per covered transaction, though many large banks have cut or dropped these fees in recent years. Debit card and ATM overdrafts legally require your opt-in; without it, those just decline for free. Linked-savings transfers are usually the cheap alternative.

01Why it matters

Overdraft fees concentrate on the people with the least slack, and a single low-balance day can cascade into multiple fees. Knowing the opt-in rule turns a fee machine back into a simple "card declined."

02The math, step by step

$20 balance, three small purchases of $12, $8, and $15 clear in one day. At a bank charging $35 per overdraft item, that's up to $70 in fees on $15 of shortfall. Opted out, the card declines on the third purchase and the fee total is $0.

03What this is NOT

04Receipts

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