How to Recover After Overdrawing Your Account

Overdrawing on your account is a stressful situation to deal with. Nobody intends to go into the red on their account, so it can be a difficult situation to reconcile. You should take immediate action to bring your account back to a positive sum. You may need to transfer money from savings or even take on an extra job. Once you get back on top of things, you should take measures to prevent getting back into the situation again.^{[1]XResearch source}

Method 1

Method 1 of 3:

Getting Your Account in the Black

If you have another account such as a savings account or a checking account at a different bank, you should transfer money from it into your overdrawn account. Transfer enough to bring the overdrawn account back into the black or, in other words, to a positive sum.^{[2]XResearch source}
You should try to pay back the debt on your account before you are reported to a collections agency. If you don’t pay it back in time, the agency will report you to one of the big debt organizations. This will have a negative impact on your credit rating.^{[3]XResearch source}
3
Find out how much you paid in overdraft fees. Your bank may charge you every time it pays for an item on your overdrawn account. The fees can accumulate to a significant amount. Make a plan to pay back the amount and use the fees as motivation to keep your account in the black.^{[4]XResearch source}
- Depending on your account, you may also have a limit on the number of items that your bank will pay for on your overdrawn account. It may pay for the largest sums first.^{[5]XResearch source}
You will be paying interest on the amount you have gone over on your account. See how much interest has accumulated since you overdrew the account, and make a plan to pay it back.^{[6]XResearch source}
5
Talk to your bank. Give your bank a ring and make an appointment to speak with a financial advisor. At your meeting, ask whether it is possible to make a payment plan that will allow you to meet your other financial obligations while paying back the overdrawn account in due time. You could say:^{[7]XResearch source}
- “I want to pay back my overdrawn account. At the moment, I have a number of existing financial obligations to meet while I pay it back. Can you help me put together a payment plan?”
6
Find out if the overdrawn account will impact your credit score. If your account is linked to a credit card, overdrawing on it may lead to a high amount of credit card debt and impact your credit score. You will be charged a high interest rate from the credit card company for any money they put into your overdrawn account. If you don’t deal with it in a timely manner, the interest will add up pretty quickly and may impact your credit score.^{[8]XResearch source}
- You can see if your credit score has been impacted by talking to your bank or looking at your credit rating on an online ratings service.
- You can find out your annual credit rating by going to the following website run by the three big credit rating agencies: http://www.annualcreditreport.com.^{[9]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
- You can also get your annual credit report by phoning the following number: 1-877-322-8228.^{[10]XTrustworthy SourceFederal Trade CommissionWebsite with up-to-date information for consumers from the Federal Trade CommissonGo to source}
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Method 2

Method 2 of 3:

Raising Money

Look around your home for valuable items that you could sell online or bring to a pawn shop. Consider getting rid of items that you could do without for a little while, such as entertainment systems, musical instruments, antiques, record collections or other valuable items. Try to get as much as you can for the items and use the cash to get your account back in the black.^{[11]XResearch source}
2
Ask for financial assistance. Talk to a close friend, family member or colleague about a loan. See if they are willing to lend you a bit of money, preferably interest free until you are able to get back on your feet financially. Try asking your friend, family member or colleague:^{[12]XResearch source}
- “I am currently in very difficult financial circumstances. Is there any way you could help me out with an interest free loan?”
3
Ask for help from your social or spiritual center. If you are a member of a church or other social group with a financial assistance program, you should consider applying for help. Try asking your spiritual leader:^{[13]XResearch source}
- “Would the church be able to help me out until I get back on my feet?”
- “Can the mosque help me out?”
- “Would the synagogue be able to help our family at this difficult time?”
- “I understand there is a financial assistance program at our center. I have contributed to it in the past. How would I apply for it?”
4
Get a side gig. You may want to take on another job at night or on the weekends, at least until you are able to bring your account back into the black. Consider your current work schedule and whether there are any hours during the week or on the weekend when you would be able to work additional hours.^{[14]XResearch source}
- You could do odd jobs for neighbors such as carpentry or painting, especially if you are good with your hands.
- You could do freelance work in your existing sector. For instance, if you are currently working as a writer or an editor, you could take on additional freelance writing jobs.
- If you have a service industry background, you could look into waitressing or bartending jobs. See what is available in your neighborhood and try to find something that works with your schedule.
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Method 3

Method 3 of 3:

Preventing an Overdrawn Account

1
Opt out of overdraft protection. Depending on your bank, overdraft protection can be offered as a standard on chequing accounts, a pay per use service or only offered on some account types. You could decide to opt out of overdraft protection or switch to an account type that does not include overdraft protection. The reason for opting out of overdraft protection is that it would prevent you from getting an overdrawn account in the first place.^{[15]XResearch source}
- The downside with this approach is that you will have to deal with running out of money at points of sale, bounced cheques and other inconveniences that overdraft protection helps you avoid.^{[16]XResearch source}
- Remember that the hassle of bounced cheques will be much worse if you don’t have overdraft protection.
Some banks offer a service where they will send you a text message if you are in danger of overdrawing your account. Once you get the text message, you can make an informed decision about whether to go ahead with a purchase and overdraw the account or save your money.^{[17]XResearch source}
The best way to avoid overdrawn accounts is to always have a bit of a cushion in your account, such as a thousand dollars. If you always keep a cushion in your account, you are more likely to stay in the black.^{[18]XResearch source}
4
Keep track of your account. To avoid future overdrawn accounts, you should keep a ledger. Use a budgeting app, an excel sheet on your computer or an old fashioned checking ledger.^{[19]XResearch source} Consider using one of the following tools:^{[20]XResearch source}
- A pen and pencil notebook. Record every expense in your notebook and make sure you don’t overspend.
- Excel. If you have a personal computer, you probably have microsoft excel. You can get free budgeting spreadsheets online for excel, which you can then use to track your expenses and plan your finances.
- Mint is an application that allows you to track your money on your smartphone or personal computer.
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