If you are feeling tight with your daily cash expenses, you know how painful it is when the bank charges you more money in fees due to non sufficient funds in your account. Your account may go $10 or $15 in the negative, but you might have to pay close to $100 just in fees due to the account been overdrawn and the bank paying on your behalf for the transactions. Here are some helpful tips on how to avoid such charges.

Keeping a ledger : Working with a balance that you get online or at the ATM is not just enough. The bank balance only shows the transactions that have been posted to your account on a particular day. There are certain transactions that are not posted instantly. Rather than forgetting about a particular transaction, it is important to write down everything as you go and keep a check on the running total. That ways, you are always aware about how much money is available in your account. Banks will often change the order of your transactions held in your account. Sometimes, they post from the largest to the smallest so you need to check with your bank about their banking procedures, but it is always a good idea to maintain a ledger with yourself so that you stay safe and stay aware about the balance availability in your account.

Asking about funds availability : Some banks will hold your money for a short period of time when you deposit a check. This will allow the bank to be sure that the check will clear. Keep in touch with your bank and ask them about when the funds will be available before you start spending to avoid any unpleasant surprises.

Opt out of overdraft coverage : This feature is available with almost all banks and they have a different name for it. They want all their customers to use this feature. The fact of the matter is, as per the laws passed by the congress, it is illegal for banks to pay debit card transactions and charge you overdraft fees when they know that there is no money in your account at the time when you swiped your card, unless you give them any written permission. There are times when you want the transactions to go through, but in most cases, the bank should make you aware that there is not enough money in your account rather than charging a $100 fee, just because you spent $3 more than what you had in your account.

Overdrafts protection : Most banks will give you the option to open another account just to cover you, in case you are spending too much. The most common practice is to link your savings account or your credit card to your checking account. Just in case, if you over spend, your bank will immediately transfer the funds from the other account to cover your transactions. There is a fee for this service but it is certainly much less than spending in overdraft fees.

These are some important and helpful tips in avoiding overdraft fees. You should always check with your bank and know about their overdraft policies before opening your account with them.

This entry was posted on Tuesday, February 15th, 2022 at 4:06 pm and is filed under Banking. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.