A
checking account with a negative
net cash balance. That is, the
owner of an overdraft checking account
owes money to the
bank rather than the bank holding his/her money. Overdraft checking accounts occur when a customer spends more money from the account than he/she
deposited into it. This may occur when he/she has written too many
checks or used a
debit card to
buy things with too much
value. Most banks charge a
fee on overdraft accounts; the amount of the fee varies from bank to bank, but is often between $15 and $30 in the United States. Some banks charge a smaller amount for the first
transaction where an overdraft takes place and a larger amount every transaction thereafter to discourage irresponsible spending.