What's the best way to avoid an overdraft fee?

• A. To continually monitor your bank balance and only spend money that you have.
• B. To continually rely on overdraft protection for every purchase.
• C. To stop using your debit card altogether.
• D. To keep a negative balance to qualify for free overdrafts

Answer: (A)

Avoiding overdraft fees comes down to keeping careful track of your money and only spending what’s actually in your account. When you spend more than you have, the bank may cover the shortfall but charge an overdraft fee for that convenience. The most reliable way to prevent that is to regularly check your balance, use balance alerts, and maintain a small cushion or buffer so you don’t dip negative by accident. Practical habits include reviewing transactions before making purchases, transferring a little money from savings if you’re close to zero, and budgeting with real-time tools so you can see how each purchase affects your available funds. If you do have overdraft protection, use it sparingly and understand the costs and limits, but treat it as a last resort rather than the normal way to pay.

Relying on overdraft protection for every purchase tends to keep you in a cycle of fees. Stopping the use of your debit card entirely is impractical for daily spending. Keeping a negative balance to qualify for free overdrafts isn’t a reliable or safe approach and often isn’t offered by banks.