You may think that if you swipe your debit card and you don’t have enough money in your checking account to cover the purchase, the transaction will be denied. But that’s not necessarily the case.
There is an overdraft coverage opt-in box that some people check when they open their checking account. If you check that box, the transaction will go through even if you don’t have a sufficient balance, but you could end up with a fee.
What the ATM/debit overdraft opt-in box does
Overdrafts give you the ability to withdraw money from your bank even if the amount requested exceeds your current balance. You get the money out of your ATM or purchase, but you will end up with a negative balance, and banks often tack on overdraft fees. Fees vary but they can be $30 or more. Banks can either cover your transaction and charge you a fee when there is not enough in your accounts or reject the transaction. You must opt into it and consent to receiving overdraft fees when they become applicable in order for the bank to be allowed to charge you the fee.
This opt-in rule is specifically for ATM withdrawals and one-time debit card transactions. Checks and automated clearinghouse (ACH) payments may be treated differently. Here’s an example: If you opt out and only have $10 in your checking account, a $20 ATM withdrawal likely will not be approved, but you also won’t get an overdraft fee.
Why this matters more after the overdraft fee cap rollback
Overdraft fees can add up quickly, especially if you overdraw your balance multiple times in the same day. That’s part of the reason why the Consumer Financial Protection Bureau (CFPB) attempted to limit overdraft charges in 2024. But the proposal was nixed by Congress in 2025.
That means it’s on you to be proactive. You can opt out of overdraft services by contacting your bank. Some transactions won’t go through if they would result in a negative balance, but you get to avoid a potentially expensive fee.
How to check your status and opt out if you want to
Consumers paid more than $12 billion in overdraft and non-sufficient (NSF) fund fees in 2025, according to a report from the National Consumer Law Center (NCLC). That’s why it’s a good idea to check with your financial institution even if you believe you did not opt into these services. If that information is difficult to access, you can contact your bank’s customer support to verify your account’s status.
Ask the representative if you are currently opted in to overdraft coverage for ATM and one-time debit card transactions, and request written confirmation of your current status.
If you opt out, you still have some choices for keeping your balance in a good position. Low balance alerts let you know when it’s time to replenish your checking account, and you can also link your savings account for transfers when necessary. Doing business with a bank with no overdraft fees and maintaining a small cash buffer when possible can also put you in a better position.
