What to Do If Your Bank Balance Drops Below Zero

We’ve all been there — checking your banking app and seeing a negative number staring back at you. 

Your balance goes negative when you have withdrawn more than you have in your account. It can happen in an instant and at the most unexpected moment. A transaction might be approved even if it exceeded the current balance. Maybe you overextended yourself this month and lost track of your debit card purchases.

The point is, your bank balance dropping below zero is more common than you’d think. The real question is, what happens if your bank account goes negative? We’ll clarify everything.

Here are five steps you need to take if your bank balance drops below zero:

Stop Using the Account

First things first, stop using the account immediately. Cease debit card usage to avoid further going over the limit. You should also pause any automatic payments. 

Check your subscription history and stop any non-essential payments by removing your account details. You can also replace the current debit card with another bank account linked to it.

Assess the Situation

Next, carefully review your account activity. Log in to your mobile application and check all the recent transactions. Look for any:

Pending charges

Automatic payments

Duplicate transactions

Knowing what caused an overdraft is necessary to prevent future ones.

You should also confirm whether you have overdraft protection in place. Some banks automatically transfer funds from a linked savings account to cover shortages. Others simply impose overdraft fees. 

Manage Overdraft Fees

Once you’ve reviewed the bank’s overdraft policy, consider possible ways to manage these additional funds. Contacting the bank should be your first option. Speak with customer service to explain the situation, especially if it is a first-time occurrence, and ask for a one-time courtesy fee waiver.

If the bank won’t agree to waive the fees, pay what you owe as soon as possible. At the same time, you should prepare to restore your bank account.

Cover the Negative Balance

Deposit funds into your bank account as soon as possible. If necessary, dip into your savings account to bring the balance back to zero. Covering a negative balance is incredibly important if you wish to keep banking with the same platform.

Remember that if you don’t cover a negative balance, the bank could close your account and turn the matter over to debt collection, which is the last thing you want.

Try to put in enough to give yourself some cushion to help protect from future overdrafts. 

Learn to Prevent Future Negative Balances

Your bank balance dropping below zero once in a while is acceptable. But don’t make it a monthly occurrence. Here are some tips you can follow to prevent future overdrafts:

Set up low balance alerts.

Stay informed on your daily balance.

Switch to a different bank, preferably one with zero or low overdraft fees. SoFi is a great option.

Link a backup savings account, which can be tapped to cover overdrafts.