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Can You Close an Overdrawn Checking Account?Brooke Vaughan // August 10, 2021Checking accounts are a safe, convenient way to pay bills, buy groceries and gas, and purchase anything else that you may need from day to day. However, as much as they help, they also need to be monitored carefully. Overdraft fees, automatic payments, and bounced checks add up quickly, leaving you with a negative balance and a massive headache. If you think that closing your account is the most logical and cost-effective solution, think again. Can You Close an Overdrawn Checking Account?Unfortunately, your financial institution can deny requests to close checking accounts if they’re overdrawn, according to the Office of the Comptroller of the Currency. If you’re serious about closing an account because it’s causing you more financial harm than good, you should focus on settling your negative balance first. What Happens to Accounts with Negative Balances?If your bank account stays overdrawn for an extended period of time, your bank or credit union can involuntarily close the account. Your negative balance can be reported to a collection agency and the credit bureaus (Equifax, Experian, and TransUnion). This would cause your credit score to drop and affect whether you are able to open an account in the future at another financial institution. How to Bring a Negative Balance PositiveFirst, try not to charge any debit card transactions to your checking account. If you continue to charge purchases to your account, you will dig yourself into a deeper hole. Banks charge you either an overdraft fee or insufficient funds fee each time that you try to make a purchase without enough money in your account. Not only will you have to pay for each purchase that you make, you’ll also have to pay the fee on top of it. Next, decide how you will settle your negative balance. You can contact your bank and request a refund, which is typically more successful if you have a positive history with your bank. When heading into the negotiation, make sure that you’ve prepared properly. Have all of your personal information ready and rehearse the points of leverage that you will use to convince the customer service representative to reverse your fees. If you’d rather not negotiate, you can bring your balance positive the old-fashioned way. Deposit money into the account or transfer funds from your savings account to cover the overdrawn balance. You can also link your checking account so that paychecks are directly deposited into your account each time that you get paid. This way you will not have to transfer money manually. Now What?Once your account balance is positive, you can proceed with closing the account. Call your bank or head to a branch to give them your account information. Make sure you don’t have any outstanding checks or automatic payments scheduled before closing the account, says the Consumer Financial Protection Bureau. You should also confirm if your financial institution charges a fee for closing an account within a certain amount of time of opening it. Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $11 million in bank and credit card fee refunds—and we’re just getting started. *Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call. Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $13 million in bank and credit card fee refunds—and we’re just getting started. *Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call. Leave a ReplyTrack and pay all of your Buy Now Pay Later installments in one place. Join the waitlist for a new Cushion offering coming soon!Sign up for our newsletter to receive product updates, financial tips, & more. What happens if you close a bank account with a negative balance?If you've had your account closed due to an unpaid negative balance, the bank or credit union would typically report this “involuntary closure” to a checking account reporting company. You may also be reported if you were suspected of fraudulent activity by the bank or credit union.
Can you close your bank account if it is overdrawn?Most of the time, yes, but your bank or credit union may require you to settle your balance before allowing you to close an account that is overdrawn. If you want to close your account, you should call your bank or credit union or go in person and give them your account information.
Can you close an account thats in the negatives?If your account is overdrawn, you likely can't close it until you bring your balance back up to zero. If you leave a negative balance for too long, the bank may close the account automatically and send the debt to a collections agency. This could show up on your credit report.
How long can my bank account be negative before its close?In most cases, banks will close a checking account after 60 days of being overdrawn. Ask your bank about the terms of their overdraft policy to find out the exact length of time your account can remain overdrawn.
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Can you close a checking account with a negative balance
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