Definition
Spending more than a checking account holds. Banks may cover it for a fee per transaction; declining overdraft coverage on debit purchases is usually the cheaper choice.
Why it matters
Overdraft fees are a tax on being broke at the worst moment, and they stack per transaction. One setting change (declining coverage) converts an expensive spiral into a harmless declined card.
Example
A $4 coffee on an empty account triggers a $35 overdraft fee, and two more small purchases the same day make it $105. With coverage declined, the card is simply refused and nothing is owed.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.