Have you ever found yourself in a situation where you thought you had enough money in your bank account, only to find out you’ve been charged an overdraft fee? These fees can add up quickly and leave you feeling frustrated and broke. That’s where overdraft protection comes in. Let’s go over what overdraft protection is, average overdraft fees, and how the Brigit app’s Instant Cash can help you avoid them.
What are overdrafts and overdraft fees?
An overdraft occurs when you spend more money than you have available in your bank account. This can happen due to a mistake in balancing your checkbook or unexpected expenses. When this happens, your bank can charge you an overdraft fee. These fees vary by bank, but on average they can range from $35 to $40 per overdraft.
Examples of overdraft fees by banks:
Bank of America: $35 overdraft fee for each item that overdraws your account, with a maximum of 4 fees per day
Chase: $34 overdraft fee per item, with a maximum of 3 fees per day
Wells Fargo: $35 overdraft fee per item, with a maximum of 3 fees per day
What Is overdraft protection?
Overdraft protection is a service offered by banks to help you avoid overdraft fees. It works by linking a backup funding source to your checking account, such as a savings account or credit card. When you make a purchase and don’t have enough money in your checking account, the overdraft protection kicks in and uses the backup funding source to cover the cost. While this service can be helpful, it’s important to note that some banks may charge a fee for this service.
How Instant Cash can help you avoid overdraft fees
Instant Cash is an overdraft prediction and protection service that helps you avoid overdraft fees. By linking your bank account to the app, Brigit can predict when you might run low on funds and send you alerts to let you know and even send you cash if it predicts you’ll run short.