How to Avoid Bank of America Overdraft Fees?

When you make a credit card transaction or issue a check and there is insufficient balance in your account, the bank may help you clear such transactions.

However, the bank will charge you for offering this help, called overdraft charges.

The Bank of America also provides an overdraft facility to its customers but knowing how to avoid this overdraft fee can help you save some handsome money.

What if an Overdraft Fee and Why Do Banks Charge It?

A bank account overdraft happens when the required balance in the account is lower than the transaction amount being processed by the bank.

In simple words, when a bank account is overdrawn for exceeding payments for an account, it results in an overdraft for the account holder.

In such situations, a bank will either decline the transaction for insufficient balance or provide the overdraft amount to the client and clear the transaction.

Most accounts do not come with overdraft protection and only a few select account types get overdraft protection depending on each bank’s financial policy.

However, almost every bank charges for these services, and account holders must pay for each overdraft transaction.

What is Bank of America’s Overdraft Fee Policy?

Like many other leading banks, the overdraft policy of Bank of America is subjective. The BoFA sets its standard overdraft protection settings for its most personal account holders.

The bank will always decline your ATM or credit card transactions if there is not enough balance in your bank account or connected bank account.

The overdraft protection is offered solely at the discretion of the Bank of America for selective transactions where the bank deems it appropriate to recover the overdrawn amount plus charges in the future.

It means, if the bank considers a transaction can be cleared by offering some deposit and later can be recovered from the account holder, it will offer overdraft protection to its client.

However, overdraft protection cannot be offered for daily banking transactions, ATM withdrawals, check returns, and credit card transactions to avoid fraud.

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How Much Does Bank of America Charge Overdraft Fee?

The Bank of America currently charges $10 per transaction for an overdraft since January 2022.

Previously, BoFA used to charge $35 per transaction as an overdraft fee and faced severe public backlash and pressure from regulators.

In recent news, the US regulators have imposed heavy penalties and fine on Bank of America for charging overdraft fees and withholding rewards without customers’ consent.

Reportedly, the Bank of America will reimburse $100 million for overdraft fees charged to its customers and pay a hefty fine of $150 million as well.

How to Avoid Bank of America Overdraft Fee?

The simplest way to avoid Bank of America overdraft fees is to keep a check on your account balance. You’ll be able to save money on declined transaction charges as well.

Here are a few methods to make sure you never pay an overdraft fee again.

Set Account Balance Alerts

Sing up for online and mobile banking accounts for 24/7 access to your bank account first.

Then, set transaction and balance alerts on either or both services you frequently use. This practice will help you monitor your bank account balance regularly.

A simple way is to use an ATM or SMS alert before making a transaction or issuing a check to someone to avoid a declined transaction.

Keep an eye on your issued checks, credit card due dates, recurring subscriptions, and other monthly payments from your bank accounts.

The idea is to ensure you have a sufficient account balance and no overdrawn amount on your account incurs an overdraft fee.

Use Balance Connect

The Bank of America allows its customers to connect one or more bank accounts to their primary bank account through its flagship Banalance Connect service.

This service allows customers to pay from alternative bank accounts when there insufficient balance in the primary account.

You can avoid overdraft charges by using this Balance Connect service as the overdrawn balance will be transferred from your own bank account and BoFA will not charge you an overdraft fee for this action.

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You can link up to 5 bank accounts including a line of credit, a credit card, a regular checking account, and any other type of account through the Balance Connect service.

Use Bank of America’s Safe Balance Account

The Bank of America Safe Balance Account is another simple alternative for its customers to avoid overdraft fees.

This special account is usually offered to students or account holders under the age of 18. This account does not come with an overdraft service or fee.

However, it also means that any transactions exceeding your available account balance will be declined as there will be no overdrawn amount available to you in this case.

Also, you may still end up with a negative balance in your Safe Balance Account in some cases due to simultaneous or multiple transactions clearing at the same time.

Better Money Habits Services

Better Money Habits is a free financial service by Bank of America to educate its customers about financial literacy.

You can enroll in this program for free and take advantage of the educational material available in the form of articles, podcasts, videos, and tutorials on the website.

This program will help you understand banking transactions, credit cards, interest rates, bank charges, overdraft charges, and several other topics to help you save money and spend wisely.

Can Bank of America Overdraft Fee be Waived Off?

You can avoid the Bank of America overdraft fee by implementing our suggestions listed above. However, the overdraft fee cannot be waived in most cases once the bank charges it to your account.

If you feel the overdraft fee is charged wrongly, you can contact Bank of America’s customer support and discuss the cancelation though.

In some cases, you may have a pending incoming transaction like a salary check or tax refund and the bank may charge you an overdraft fee mistakenly.

How to Contact Bank of America Customer Support?

You can visit the nearest BoFA branch to discuss bank overdraft charges or any other dispute on your bank account.

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Alternatively, you can call their customer support services at 844.375.7028.

Make sure to save time and enjoy convenience by scheduling an appointment before visiting your nearest BoFA branch.

Frequently Asked Questions About Bank of America Overdraft Fee

Let’s answer some frequently asked questions about the Bank of America Overdraft Fee.

How Much Does Bank of America Charge for an Overdraft Transaction?

BoFA currently charges $10 to its customers reduced from $35 after a revised schedule of charges in January 2022.

Can I Avoid an Overdraft Fee from BoFA?

Yes. You can avoid overdraft fees by using the BoFA Balance Connect or Safe Balance services.

There is a Sufficient Balance in my Account, Why Am I Still Being Charged for an Overdraft?

Some transactions may incur additional charges or penalties that may result in a reduced account balance and you may end up paying an overdraft fee for such transactions.

You can use BoFA’s Balance Connect services to connect up to 5 bank accounts to avoid overdraft charges.

What Does the Available Balance Mean?

The available balance means the net balance in your account after deducting amounts for all pending transactions and bank charges.

If your available balance is lower than the required transactions, your transaction will either be declined or approved with an overdraft depending on the bank’s discretion.

Can I Still be Charged if I Have Overdraft Protection?

Yes. In some cases, even when you’ve got overdraft protection, you may end up paying an overdraft fee if the bank provides you an overdrawn amount to clear any transaction.

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