An overdraft happens when you spend more than the balance in your account. The bank covers the transaction and charges a fee, or it declines the transaction and charges a different fee. Either way, it costs you. Overdraft fees average around $35, and a single day of multiple overdrafts can trigger hundreds of dollars in charges.

The rules changed in 2010. The Federal Reserve required banks to get customers' permission before enrolling them in overdraft coverage for debit card and ATM transactions. Without permission, the bank must decline the transaction and charge no fee, though it may still charge a nonsufficient funds fee if you write a check or set up an automatic payment that bounces. Many customers opted in without realizing the cost.

Overdrafts are controversial. Banks argue they provide a service, covering a payment when a customer needs it. Consumer advocates argue they are a high-cost form of credit that traps low-income customers. The Consumer Financial Protection Bureau has proposed rules to treat overdraft lending like other credit products, requiring disclosures and limiting fees. Banks have responded by offering small-dollar loans and grace periods.

Some banks have eliminated overdraft fees entirely. Capital One, Ally, and Citibank no longer charge them. Others have reduced them or added buffers. The trend is toward fewer fees, but not all banks have followed. Read the account agreement before you opt in.