An overdraft occurs when a bank account holder spends more money than is available in their account, leading to a negative balance. This situation allows the account to temporarily function beyond its available funds, often with the bank’s prior approval. While it can prevent bounced checks or declined transactions, overdrafts usually come with fees and interest charges. Managing overdrafts responsibly is essential, as repeated occurrences can lead to higher fees and potential account suspension. Some banks offer overdraft protection services to cover shortfalls, but these services often involve additional charges.