Debit cards let you use your checking account as conveniently as a credit card, but with the cash from your checking account. And before new banking regulations were enacted in 2010, your bank might have allowed charges to clear your account even if it was overdrawn. The bank considered this a courtesy to spare you from the inconvenience of a declined card at the checkout. Unfortunately, it also meant you had no choice in whether you would have preferred the bank decline your card instead so you could avoid the overdraft fee.
The new regulations now require banks offer customers the ability to opt in or opt out of overdraft protection for transactions made with their debit or ATM cards [source: Federal Reserve]. If you opt in, the bank will cover any overdrafts to your account and charge you a fee, but if you opt out, your bank must decline any debit card purchases that exceed your account's available balance [source: Federal Reserve].
You can also link another account, like your savings account, to your checking account to cover transactions when you become overdrawn. There's typically a fee for the service as well, but it's generally much less than an overdraft charge [source: Federal Reserve].
Even if the bank declines your debit card, the next fee may still apply for checks.