“How is my bank account so far in the red?”
If you’ve ever accidentally overspent after a weekend of running errands, you know this feeling. You take a look at your bank account to see how close to zero you are. Byt then you find out that not only are you below zero, but there’s a nice fat bank fee slapped on top to make matters worse.
That’s the last thing you needed.
But, the good news is that you might be able to get that overdraft fee waived. Getting overdraft fees waived is typically pretty easy. But you have to be patient and learn to do it right.
What’s an Overdraft Fee?
First of all, what’s an overdraft fee? Overdraft fees are also called nonsufficient funds fees or insufficient funds fees. They happen when you spend more money than is in your account.
If you think about it, it makes sense. When you overspend, you’re essentially ‘borrowing’ money from the bank. If they don’t charge you a fee, you’re borrowing it for free. And what bank is in the business of lending people money for free? You’ve got to get a proper loan for that!
Banks do make a pretty penny off of overdraft fees. America’s 3 biggest banks alone raked in $5.1 billion in a 12-month period.
Tips for Getting Overdraft Fees Waived
The good news is that getting overdraft fees waived isn’t that difficult. But there is a technique to it.
Follow these tips and you shouldn’t have any trouble kissing that fee goodbye.
1. Be Polite
First and foremost, when you talk to the representative be pleasant and polite. The old adage about catching more flies with honey than vinegar is most certainly true.
Nobody likes dealing with a rude, irate customer and many representatives will be less likely to help you out. In fact, they’re trained to deal with irate customers and not give in to their demands. If you speak to them nicely, however, they’re more likely to do you the favor of waiving your fee.
2. Ask to Have It Waived
All you really have to do to get your overdraft fee waived is to ask. In many cases, if you call up your bank and simply state that you noticed an overdraft fee and would like to have it waived, they will. It is in their best interest to keep you a happy and satisfied client, after all.
They won’t always waive it on the first try, though. Often the representative will give you some random excuse why they can’t waive the fee.
They still have an obligation to the bank to keep as much of your money as they can. Plus, sometimes it can count negatively against an employee’s job performance if they grant too many fee waivers. Or the bank may allow them a limited number of waivers.
Whatever the reason, sometimes you may have to try a little harder than simply asking. In that case, move on to the next tip.
3. Point Out Your History
Be sure to remind the representative how great of a customer you have been. Remember, the bank would rather keep you as a customer than lose your business over an overdraft fee. Of course, this technique works better if you actually have been a good customer.
If you tend to overdraft your account a lot, it will be more difficult to play this card. In that case, you may want to jump down to tip number 9 and learn how to avoid overdraft fees in the first place.
4. Remind Them How Long You’ve Been a Customer
If you’ve been with the bank for a number of years, that can count in your favor as well. It shows that you are (to some extent) loyal to the bank and a valuable customer.
Banks spend a lot of money on customer acquisition. The longer you stay with them as a customer, the more they get out of their investment. This is because they get more payoff on the money they spent to acquire you as the years go by.
5. Be Persistent (But Patient!)
Don’t get angry and yell at the representative. That probably won’t get you anywhere. But do be persistent.
Banks are constantly competing to have better customer service than all the other banks. That’s one of the big ways they get people to trust them with their money.
Use that to your favor. Let the representative know, nicely, how unhappy you are about this fee. In the interest of keeping the customer happy, they just might give in.
6. Try a Different Representative
If you’re not getting anywhere with this representative, try a different one. Hang up and call back to get someone else.
There’s a certain amount of personal discretion when it comes to waiving fees and one representative might be firmer than another about it.
7. Go In Person
If all else fails, go to the bank in person. Bank representatives will find it harder to say no to your face than to a faceless voice on the phone.
But remember, you’re not there to strongarm the poor bank employee into doing what you want. Be polite, ask nicely, and you’ll be more likely to get your way.
8. Pay the Fee
In some cases, all your efforts may fail. This happens most often if you are a habitual offender. Bank representatives are less likely to feel bad for you if you keep making the same mistakes all the time.
If you can’t get the bank to waive your fee then just take the hit and move on. It was your fault, after all, that you spent more money than you had. If you find that you lose track of your finances often, then check out the next tip and learn how to avoid overdraft fees in the first place.
9. Don’t Get Overdraft Fees in the First Place
The easiest way to get out of paying overdraft fees is to not get them in the first place. But sometimes avoiding them is easier said than done. Not everyone is a math whizz or super diligent about marking down every purchase in their checkbook.
Here are a few practical ways that you can give yourself a helping hand and avoid those pesky bank fees.
1. Opt Out of Overdraft Protection
You may have signed up for overdraft protection or it may have come automatically with your account. Regardless, this is the reason why you get hit with overdraft fees. If you don’t have overdraft coverage, your card will simply not work if there isn’t enough money in your account.
Of course, this would make for an embarrassing moment when you try to pay for something. But that embarrassment might be worth saving yourself lots of money in fees.
2. Stop Automatic Payments
Setting up automatic payments is a fantastic way to ensure that you don’t forget to pay your bills. Unfortunately, they also make it easier for you to unwittingly overdraft.
It’s easy to buy lunch thinking you have $200 in your account. But then you find out later that your $198 car payment went through before you bought your sandwich. Suddenly your $5 sandwich comes with a side of overdraft fees.
3. Sign Up for Alerts
Many banks have alert systems that you can set up. You can set up low balance alerts, payment reminders, and more.
This is a bit of a safer technique than automating your payments. You still have to take a few minutes to pay the bills, but you’ll know how much is in your account when you do it. Plus, low balance alerts will let you know when you have to stop.
Most banks offer several ways (like email or text) to receive alerts so you can customize how you want. Choose the method that makes the most sense for you.
4. Sign Up for Direct Deposit
Signing up for direct deposit is another good way to help yourself avoid overdraft fees. When you receive paper paychecks, it’s easy to forget to deposit it for a couple of days.
Plus, they typically take longer to clear. So it’s possible to deposit it and still not have money because the funds aren’t available yet.
5. Link Your Checking and Savings Accounts
Most banks will let you link your checking and savings accounts. Then, if you overdraft your checking, they will automatically pull from your linked savings account.
This is nice, but they still charge a fee for it. It’s usually only $10 or $12 as opposed to about $35 for an overdraft fee, but it’s still money that’s coming out of your pocket.
A better idea is to link them so you can move money quickly if need be. Set those low-balance alerts that we talked about earlier and when you get one, move the money over yourself using online or mobile banking. If you have them linked, there’s no waiting period and you’ve got money where you need it.
Don’t do it too often, though. Otherwise, you might find that there isn’t any money left in your savings account to move over!
Now you know what to do if you’re ever faced with an unwelcome overdraft fee. Follow the tips we’ve talked about here for getting overdraft fees waived and you should be good to go.
But remember, if overdraft fees are becoming a habit you may find it difficult to sweet-talk your bank into waiving them. In that case, follow our tips for avoiding overdraft fees in the first place.
Good luck and happy banking!
For more great financial advice be sure to check out our learning center.