What is typically charged for spending more money than is available in a bank account?

When a person spends more money than is available in their bank account, they incur what is known as an overdraft. An overdraft fee is a charge that banks impose when an account holder withdraws more funds than their account balance can cover, which can happen through various transactions such as writing a check, using a debit card, or making an electronic payment. This fee serves as a penalty for the shortfall and is typically a fixed amount.

Understanding overdraft fees is crucial for managing personal finances because they can accumulate quickly if a person frequently spends beyond their account balance. By being aware of this, individuals can better monitor their spending and avoid these additional costs, ultimately helping them maintain better control over their financial situation.