How to Clear a Negative Balance in Your Bank Account: Step-by-Step Guide

Uh-oh. You forgot that your car insurance premium was due this week, and the automatic payment was processed before your paycheck hit. Now your bank account has a negative balance, and you’re stressed out. What should you do? 

First: Take a deep breath. A negative bank account balance has happened to just about everyone at least once. 

Want to know how to clear a negative balance in a bank account? Let’s take a closer look at what it means to be overdrawn, what to do if it happens, your bank’s role, and how to avoid future overdrafts.

What Does It Mean When Your Bank Account Balance Is Negative?

When the balance in your bank account dips below zero, your account is in the negative and overdrawn. This could happen if you write a check, withdraw money at an ATM, make an automatic bill payment, or complete a debit card purchase for an amount that’s more than your bank account balance.

If you don’t have enough funds in your account to cover a transaction, your bank might still pay for the transaction, covering your shortfall. Repayment often comes from your next deposit of funds.

A lot can result from having a negative bank account. You might be charged fees, and your account may be suspended or closed if you don’t fix the problem soon. 

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Causes of a Negative Bank Balance

Here are some of the reasons you could face a negative balance:

• Unexpected expenses: If you don't have enough of a cash cushion or an emergency fund, a medical bill, car repair, or other unplanned cost might drain your account.

• Timing issues: If bills get paid before you receive a direct deposit or deposit money yourself, your account could end up in the red. 

• Automatic payments: Subscriptions or recurring payments are sneaky, especially if you’ve just added a new subscription. It’s easy to overlook a payment and end up with an overdraft.

• Bank fees: If you get slapped with a slew of bank fees all at once, your balance could plunge. 

• Fraudulent purchases: If a thief accesses your account and makes purchases without your knowledge, it could cause your balance to slip into the negative. 

• Human error: Little financial slip-ups—like forgetting to record a transaction, or not noticing the grand total of your automatic payments in a given month—can put you in the negative.

• Zombie accounts: If you forget to close an account with a monthly maintenance fee, those fees can eventually put your bank balance in the red. 

Knowing the issues that can cause a negative bank balance can help you stay alert, manage your money effectively, and avoid the stress of a negative balance.

Immediate Steps to Clear a Negative Bank Balance

Want to know how to get your bank account out of negative status ASAP? Follow these steps.

Stop using the account

Until the account is firmly in good standing, don’t make any more transactions of any kind. This includes using your debit card and writing checks.  

Find out what happened—and get ahead of payments

Sign into online banking, and find out why your account is in the negative. Make sure there aren’t more payments due to hit while your account is in the negative. If there are, reach out to those creditors or other entities (like utility companies) to see if they can be canceled for the time being. 

It’s important to bring your accounts current ASAP if you can—and if not, let your creditors know what happened. You may get a late fee, but your account may also have a grace period of several days after the bill is due before you’re charged a fee. Either way, pick up the phone and find out what’s possible.

Transfer funds from another account or source

Don’t delay fixing an overdraft problem, because sometimes that leads to more fees or more accidental overdrafts. If you can, transfer funds from another bank account. This is most easily accomplished with an account at the same bank, like a savings account. 

But even if you need to transfer cash from another bank altogether, it likely won’t take long for the money to hit your account. If you use Zelle to move money from one bank to another, for example, it might take only moments—or perhaps a day or two at most. 

What if you don’t have another account with money in it? We’ll go over a few options later in this article. But a good place to start could be to ask a caring friend or family member to spot you a little money until you get paid again.  

Get in touch with your bank

Call customer service and request a refund of any fees charged on your negative bank account. If this is your first time overdrafting, your bank may be willing to refund you—it’s worth it to ask. 

Also ask about options to prevent a negative balance in your bank account in the future. Your bank may offer overdraft protection. This means you link another account to cover overdrafts in your main account. Some banks charge a fee for moving money automatically to prevent an overdraft.

How to Work With Your Bank to Resolve Negative Balances

Here are a few tips for best results when you talk to your bank.

Be kind and direct

You’re probably in a state of high emotion because of your negative balance—that’s understandable! Remember it’s not the bank employee’s doing, and they’ll probably be happy to help you get your account back on track. Approach this conversation as kindly as you can. 

Here’s what to cover: 

• Give your name, account number, and any other necessary details. 

• Explain why you overspent your account—maybe a bill hit at exactly the wrong time, or you forgot to deposit a check you needed to cover upcoming charges. 

• Ask that any fees be waived, either partially or fully. If you had multiple payments impacted by your overdraft, you may have gotten dinged a fee for each of them. 

• Point to your history as a good customer if this is the first time you’ve had a negative balance.

• Ask about options to prevent a negative balance.  

Discuss overdraft protection options

Many banks offer overdraft protection to make sure your transactions go through smoothly, and prevent your account from going into the negative. It can offer peace of mind, but it’s rarely free. 

If your checking account balance is too low to cover a charge, the bank can move funds from a linked savings account, another checking account, credit card, or line of credit. These options could help you avoid declined transactions, typically up to a maximum dollar amount. 

Overdraft protection could help you avoid a negative balance, but you might still pay fees. Many banks charge for each overdraft transaction, at an average cost of $35 per transfer. If your overdraft protection is linked to a credit card, you might also pay interest on the borrowed amount.

Get help from someone else, if need be

Sometimes a customer service rep won’t be authorized to waive fees. In that case, and if you think you have a compelling reason to ask for leniency, you might (politely) ask to speak to a manager. 

Change banks if you need to

You may be able to change a manager’s mind about helping you by saying you’ll switch banks. Be nice about this—it’s your right as a customer to change banks, but there’s no reason to raise your voice to a bank employee. 

With a negative balance, you might not look like a valuable customer that they want to work hard to keep. So if you say you’re willing to switch banks, be prepared to follow through.

It’s worth noting that an increasing number of banks don’t charge fees for overspending your account. So if you’re going to switch banks, opt for one of these. 

Bank Fees and Negative Balances 

Overdraft fees can make your negative bank account balance even more expensive. Some banks try to process the transaction more than once, and charge you each time it fails. Some banks process the biggest transaction first even if doing so causes multiple smaller transactions to fail. If a bill payment is debited from your checking account and you don’t have the funds available, you could be charged an overdraft fee. If another payment comes out the same day, you could incur yet another overdraft fee—and so on. Any of these practices could send you deeper into the hole.

According to the Financial Health Network, consumers paid $12.1 billion in fees related to negative bank balances in 2024.

What is an overdraft fee?

Here’s a quick review. A bank might charge you an overdraft fee if it covers charges that sent your bank account into the negative (until you can bring your account back up to positive). You might also incur an overdraft fee for overdraft protection you’ve opted into (when your bank transfers money from a linked account to cover your overage). If you don’t opt into this coverage, your overdraft transactions will just be rejected. (Though that could come with a fee, too.)

These fees often come to around $35 apiece, which is significant. Your bank could charge fees for every transaction while your account has a negative balance. 

What is a non-sufficient funds (NSF) fee?

You could be charged a non-sufficient funds (NSF) fee if your bank declines a transaction when you don’t have enough money to cover it. Unlike an overdraft, which takes money from some other source to complete the transaction, an NSF means the transaction failed. 

Automatic Clearing House (ACH) transactions like bill pay services or direct payments may be turned down if you don’t have enough money in your account. Even so, you could still be charged an NSF fee. NSF fees tend to run around $34. Be aware that your bank won’t ask you to opt in to NSF fees.

What is a negative balance fee?

A negative balance fee is also called an extended overdraft fee. Unlike a one-time overdraft fee, your bank could charge an extended overdraft fee if you don’t make your account positive right away. For example, your bank may charge an extended overdraft fee of $7 every day.

Options When You Can’t Immediately Cover a Negative Balance 

What should you do if you can’t bring your bank account balance back up above $0 immediately? Here are a few options to get the cash you need:

• Borrow some money. If you have a loved one who could help you out of a jam, ask them. You might want to draw up a loan agreement laying out how you’ll pay them back. 

• Ask for help from the bank. Your bank might offer small dollar loans to get you back on track. For example, Bank of America offers a program called Balance Assist, which lets you borrow up to $500. 

• Side hustle. If you’ve got a little time and a car, consider earning a little extra cash as a rideshare or delivery driver. 

• Declutter for cash. If you have extremely full closets at home, why not put some of your clutter up for sale on a local social media marketplace or at a yard sale? 

• Ask for a paycheck advance. Your employer may be willing to pay you part of your earnings earlier than scheduled. There are accounts you could set up that offer this service as a regular feature (but you have to set up the account before you need the advance). 

Here’s one option to avoid: Payday or other short-term loans. Payday loans are considered predatory because the terms are bad for borrowers. These lenders often charge exorbitant interest on small amounts of money—the average APR on a payday loan is nearly 400%. 

If you can’t repay your payday loan within the allotted time (often two weeks), you’ll typically have the option to renew the loan. That means a whole new set of fees. The average payday loan borrower renews their loan eight times before they finally manage to pay it off. Payday loans are illegal in some states. 

How to Prevent Future Negative Balances

You can take preventive steps now to avoid a negative balance in the future:

• Don’t opt in for overdrafts that come with fees. Be prepared for your debit or ATM card to be declined if you don’t have enough money in your account to cover a transaction.

• Link a backup source of funds to your checking account. Some banks charge a fee for this service, but it’s usually lower than an overdraft fee. Your backup source should be a savings account if possible. You could use a credit card, but you’ll pay interest. Covering an overdraft is typically considered a cash advance (so there’s no interest-free grace period).

• Check your account balance regularly, and track your expenses. Before making a purchase or ATM transaction, think about upcoming paper and electronic bills you may need to pay, and whether you'll have enough in your account to cover them. 

• Sign up for low balance and fraud alerts. A lot of banks can alert you via text or email when you're below a certain balance, or if they suspect fraudulent activity, like a scammer getting access to your money. You can usually set up alerts through your bank’s website or app.

• Consider changing banks. Some banks and credit unions offer cheap or free overdraft protection. If you often come close to running out of money, find a bank that won’t hit you financially hard when you do. 

• Tighten up your budget. Creating a budget doesn’t sound like any fun, but knowing where your money goes can give you peace of mind. It could also make it easier to save money to help you through a future financial emergency. 

What Happens if You Don’t Clear a Negative Balance

What happens when your bank account goes negative? The consequences can escalate. If you close your account with a negative balance, or your bank closes it, expect the account to show up on your credit record with ChexSystems or Early Warning Services. These are systems that track consumers who have had issues with their bank accounts. This could, for a time, make it harder for you to open new accounts.

Your account could be frozen. It could also be sent to collections. This typically occurs if you're very late on replenishing your negative funds and paying any fees. It’s best to get the problem resolved as fast as possible—and call your bank if you’re struggling, so they know what’s going on. 

If you receive a notice from a collections agency due to an overdrawn account, take it seriously, but don’t panic. Don’t ignore the problem. Talk to or negotiate with debt collectors.  

Struggling with a negative balance in your bank account doesn’t have to impact your financial life forever. If you act quickly to resolve the problem, you could avoid permanent damage to your finances and credit standing. Even if you’ve struggled to open new bank accounts because of your ChexSystems report, search for a second-chance bank account that could help you rebuild. 

If Overdrafts Are a Chronic Problem, You Have Options

If you’re living paycheck-to-paycheck, you’re likely very familiar with the stress of managing your money and ensuring you don’t overspend your bank account. Unfortunately, lingering revolving debt (like credit card debt) often goes hand-in-hand with not having enough income. Here are a few options for helping yourself.

Boost your income

This may be more manageable than trying to cut your spending to the bone. Can you pick up more hours at work, or take on another job? Having more budgetary breathing room is a good feeling. 

Consider debt help

If you’re struggling with debt payments, you don’t have to suffer alone. There are trained professionals who could help you in a few ways. One option is debt settlement, which means negotiating with your creditors to reduce the amounts you owe.

You can negotiate with creditors yourself, or work with a professional debt settlement company. Freedom Debt relief has helped clients resolve over $20 billion in debt since 2002. You can find out how to get started here. 

Another option is a debt management plan. A nonprofit credit counseling agency helps you create a three- to five-year plan to pay off your unsecured debts (like credit cards and medical bills). If you go this route, research the agency beforehand. Look for those that are accredited by an outside agency such as the National Foundation for Credit Counseling.   

Bankruptcy is also an option

Bankruptcy is legal protection from creditors, and it’s a financial decision, not a moral failing. Individuals typically file Chapter 7 or Chapter 13 bankruptcy. The best person to talk to about whether bankruptcy is a viable option for you is a bankruptcy attorney licensed to practice in your area.

Your negative bank balance isn’t the end of the world, and you can work to prevent it from happening again.