What is overdraft in banking?
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Overdraft is going negative in your bank account.
Overdraft protection allows this to happen, usually for a fee (and a limit of occurrence). It sounds like the opposite, but it’s “protecting” you by not declining a charge that may be a necessity, like rent.
Depending on the account type (like a youth checking) and the bank, protection is either off by default or not allowed (so it declines the charge).
Bank of America for instance charges $10 for each time you overdraft by >$1 (an odd aspect though is they only charge this fee 2x a day, so if you overdraft 5x in one day then you only get charges $20 in fees).
Depending on your bank, this may apply to checks and not debit card purchases (so you buying gas at the pump may get declined, but not your check for rent).
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What’s really stupid are **NSF fees** (non-sufficient funds), which is where you don’t have overdraft protection, so it gets declined, but they charge you for this! Bank of America used to charge $35 when they had to decline a purchase (they also used to charge $35 for overdraft protection instead of $10, they used to also charge $12 if they had to pull from a linked savings account to cover the purchase; many banks still charge this linked transfer fee).
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