Key Takeaways

A negative bank account balance happens when you spend more money than you have in your bank account unless you have opted for overdraft protection. Monitor your bank account and spending closely to avoid overdraft fees and to ensure the bank doesn’t close your account.

When you have a negative bank balance, it means that you’ve spent more money than what you had in the account. Letting this happen can get expensive because the bank will charge fees, which can add up over time. You can do a number of things to prevent this from happening, such as by linking your checking account to your savings account and by keeping a tab on your balance regularly.

What Is a Negative Bank Account Balance?

A negative balance on your bank account is when your account goes below $0. It’s common and often happens when you charge a transaction without checking your balance. For example, if your bank account has $400 in it, and you have autopay set up for your rental payment of $800, your account will show a balance of $-400, along with any fees that the bank will charge. You’ll need to deposit enough funds in your account to bring it back to good standing.

What Causes a Negative Bank Balance?

You can get a negative balance on your bank account for a variety of reasons. You may deposit a check and charge a transaction before the check is cleared and the funds are deposited in your account. You may also lose track and spend money without knowing how much you have in your account. Here are a few more reasons why this may happen.


Oftentimes, this happens due to an honest mistake. You may have set up autopay or scheduled a payment you forgot about. If you pay for other transactions from your account and your balance is low, or if a deposit you are expecting is late, your account may show a negative bank balance.

Teresa Dodson, debt relief expert and founder of Greenbacks Consulting, shares this advice:

"Get in the habit of checking your bank account and spending at least once a week. Going negative is usually due to a lack of awareness of what you spend. And to avoid miscalculations, I highly recommend NOT to set up autopay. Be in control of your outgoing payments."

Mistakes When Writing Checks

You may make a mistake and write the wrong amount on a check. If you accidentally write a larger amount, you can easily overdraw the account. If you have multiple bank accounts, it is easy to get confused about how much money you have in each account. You may write a check or charge a transaction to the wrong account with a lower balance.

Mistakes can happen not just from writing checks but also from automatic payments, using a debit card, ATM withdrawals, and electronic payments.   

Consequences of a Negative Bank Account Balance

In most cases, a negative bank balance is because of mistakes and miscalculations, and you can quickly bring your account back to good standing by depositing money. But, if you have a negative balance consistently due to debt, poor money management, or budgeting, there may be bank fees and other consequences.

Overdraft Fees

The bank can charge an overdraft fee when the amount withdrawn from your account is more than the balance available. This can happen when you opt-in for overdraft services, and the bank covers that transaction. Typically, banks charge $34 for overdraft fees. If you frequently overdraw your account, these fees can add up. If you don’t deposit funds right away to correct it, there may be additional fees.  

Declined Transactions

If you have not signed up for overdraft protection, whenever you make a purchase that costs more than the funds you have in your account, your debit card purchase can be declined. Additionally, the bank will charge you a returned item fee or a non-sufficient funds fee for each declined transaction, along with a fee for bounced checks when applicable. This can cost you approximately $35. This can be easily avoided by keeping track of your account balance. You’ll need to deposit money into your account when your balance gets low.

Damage to Credit Score

Whenever you apply to open a new account, credit card, or personal loan, lenders will look at your credit score and your history. If you have too many overdrafts on your account, the bank may close your account, and it may go to debt collection. This is reported to credit bureaus and reflected in your credit report, which can lower your score. Getting a loan with bad credit can be challenging as well as expensive because lenders usually charge higher interest rates for such borrowers.  

Recovering from a Negative Bank Account Balance

When your bank account shows a negative balance, there are a number of things you can do to recover from it. If this is the first time this has happened, the solutions are easy. But if you routinely get negative balances, it may be time to seek counseling.

Negotiating with Banks or Creditors

In some cases, financial institutions may be willing to negotiate with you to reduce or eliminate the fees associated with it. This is typically true if this is the first time this has happened. For example, if you accidentally exceeded your credit limit, your provider may be willing to waive the fee. If you don’t think you’ll be able to resolve the overdrawn account, or if you can’t afford to deposit the amount of money needed, your best bet is to negotiate with your bank to create a plan to repay this money. The bank may be willing to enroll you into a payment plan for ease of repayment.  

Requesting Waived Fees

Your credit union or bank may be willing to waive fees. They can be particularly generous and sympathetic if your account is usually in good standing and this is the first time you’ve slipped. Call the customer care department at your bank and speak to a representative to request waived fees.

Seeking Financial Counseling

In some cases, a negative bank balance can be because of deeper issues that you may need to explore and resolve through financial counseling. If you have too much debt, financial hardship, or an overspending problem, it may be worthwhile to consider financial counseling.

There are many resources available where you may be able to get free or low-cost financial advice. Non-profit agencies offer credit counseling to help you review your finances and budget and give you advice on how to manage your finances better so you can avoid this situation in the future.

Top 3 Tips for Avoiding Negative Bank Account Balances

A negative bank balance is a problem that can be easily avoided by practicing proper money management. You can put away your cards and avoid using your account until you figure out what happened. You don’t want to charge more transactions and make your situation worse. Here are three tips to help you avoid a negative balance on your bank account in the future.

1. Setting up Alerts

One of the easiest ways to avoid overdrawing your account is by setting up balance alerts through online banking. Once you do this, your bank will send you an automated email or text whenever your available balance dips below a predetermined amount. These alerts will help you catch the problem before it’s too late so you can deposit funds in your account or stop making transactions.

If you haven’t already, you can set up direct deposit to ensure that your paycheck will be automatically deposited to your account. The funds will usually be available the next business day. This is another easy way to avoid a low balance.  

2. Keeping Track of Spending

Get into the habit of checking your bank statements regularly to see how much you have in your account. Track your spending so you know exactly how much you’re spending in each category. This will give you a better idea of where you stand so you’ll know when you reign in your spending if you are running low on money.

3. Creating a Budget

Create a monthly budget and make a note of your income and all your expenses. Check to see how much money you’ll be left with at the end of each month. Creating a budget will help you create a better plan to ensure you’re not short on money. Review each spending category to see if you can cut down your expenses somewhere, such as shopping or dining out. If your expenses are still more than your income, consider earning some extra money through a side gig or part-time job.

The Bottom Line on Negative Bank Balances

Running a negative balance on your bank account can become very expensive. But you can avoid overdraft fees by monitoring your bank account, setting up alerts, and by learning better money management skills. If you do get an overdraft fee, request your bank to get it waived if it is your first overdraft. Deposit funds to your account at the earliest to bring your account back to good standing.

If you’re consistently running a negative balance due to overwhelming debt, it may be time to seek debt relief. Get in touch with TurboDebt and take benefit of our free consultation to see how we can help you find the right debt relief option for your individual needs.