Final answer:
When there aren't enough funds in your account to cover a purchase, the bank may decline the transaction or allow it to go through for a fee known as an overdraft fee. Accounts can also be used for safe storage of money and can be accessed using various methods, including debit cards, checks, or direct withdrawals. Credit cards function as short-term loans to be repaid later.
Step-by-step explanation:
If you attempt to make a purchase without sufficient funds in your account, the bank or credit union has a few options. Typically, if there aren't enough funds, the transaction will be declined, meaning the merchant will not process the sale, and you'll need an alternative payment method. However, some financial institutions offer overdraft protection, which allows transactions to go through even when the account lacks sufficient funds. Unfortunately, this service often comes with a hefty overdraft fee. Carrying a negative balance can be expensive, as additional fees may accrue until the account is replenished.
Banks facilitate a wide variety of transactions in our economy, beyond just overdrafts. Through checking accounts and savings accounts, money can be withdrawn using direct withdrawals, checks, or debit cards. Also, the use of a credit card equates to taking a short-term loan from the credit card company, which you must pay back at a later date, typically the end of the month.