Minimize Overdraft And Bounced Check Fees
Getting rid of overdraft and bounced check fees is a really important step if you happen to be one of the people who is at odds with this problem. Not only is this a very expensive problem, it should be regarded as a red flag for the very serious threat to your financial future because it denotes a poor grasp of basic money management.
What's an overdraft? An overdraft is simply the negative balance that shows up on your account balance after you're made one or several transactions and their total is superior than the amount of money that you had on your account. Check writing, ATM withdrawals, online bill payments, any transaction that reduces the money in your account can get you overdrawn.
When the transaction shows up, your bank has the choice of either paying for it or not. If it elects to honor the transaction regardless of the fact that you don't have enough money to pay for it, it will charge you an overdraft fee. If, on the other hand, it decides that the check will not be paid and returns it for non-sufficient funds, it will then hit you with a bounced check fee.
Getting rid of those fees means simply that you have to keep a tight grip on your account balance to avoid negative balances. The best way to achieve this is to keep track of how much money you have by keeping your account register up-to-date. Write down all your transactions as soon as they happen. And don't forget to subtract any bank fees that you incur.
Pay special attention to your electronic transactions. Record your ATM withdrawals and fees, debit card purchases, and online payments. Don't forget about online bill payments you may have set up for utilities, insurance, or loan payments. Keep an eye on your account balance. Remember that some checks and automatic payments may not have cleared yet.
Make it a monthly habit to check balance your accounts. In the time between getting account statements, you have several options for checking the rate at which your transactions are clearing: by phone with your bank, online, or at an ATM that doesn't charge you a fee for checking your balance.
Unfortunately, sometimes overdrawing your account just happens. What you need to do then is to get your account back to positive as soon as possible. You will have to not only cover the amount that you did not have, but also include whatever you got charged by your bank. If you would like to avoid this altogether, you can ask your bank about other ways of covering overdrafts.
Odds are, you will be given two choices: linking your checking account to a savings account, or getting an overdraft line of credit. The first option involves linking your checking account to a savings account so that funds are automatically transferred from the latter to the former to prevent any overdraft situation. The second option involves filling out a credit application (which will be treated as a loan) for an overdraft line of credit. What this does is that you're allowed to withdraw funds that you don't have, up to your credit limit. The used portion of your credit line generates interest, and the line itself may be subject to an annual maintenance fee.
What's an overdraft? An overdraft is simply the negative balance that shows up on your account balance after you're made one or several transactions and their total is superior than the amount of money that you had on your account. Check writing, ATM withdrawals, online bill payments, any transaction that reduces the money in your account can get you overdrawn.
When the transaction shows up, your bank has the choice of either paying for it or not. If it elects to honor the transaction regardless of the fact that you don't have enough money to pay for it, it will charge you an overdraft fee. If, on the other hand, it decides that the check will not be paid and returns it for non-sufficient funds, it will then hit you with a bounced check fee.
Getting rid of those fees means simply that you have to keep a tight grip on your account balance to avoid negative balances. The best way to achieve this is to keep track of how much money you have by keeping your account register up-to-date. Write down all your transactions as soon as they happen. And don't forget to subtract any bank fees that you incur.
Pay special attention to your electronic transactions. Record your ATM withdrawals and fees, debit card purchases, and online payments. Don't forget about online bill payments you may have set up for utilities, insurance, or loan payments. Keep an eye on your account balance. Remember that some checks and automatic payments may not have cleared yet.
Make it a monthly habit to check balance your accounts. In the time between getting account statements, you have several options for checking the rate at which your transactions are clearing: by phone with your bank, online, or at an ATM that doesn't charge you a fee for checking your balance.
Unfortunately, sometimes overdrawing your account just happens. What you need to do then is to get your account back to positive as soon as possible. You will have to not only cover the amount that you did not have, but also include whatever you got charged by your bank. If you would like to avoid this altogether, you can ask your bank about other ways of covering overdrafts.
Odds are, you will be given two choices: linking your checking account to a savings account, or getting an overdraft line of credit. The first option involves linking your checking account to a savings account so that funds are automatically transferred from the latter to the former to prevent any overdraft situation. The second option involves filling out a credit application (which will be treated as a loan) for an overdraft line of credit. What this does is that you're allowed to withdraw funds that you don't have, up to your credit limit. The used portion of your credit line generates interest, and the line itself may be subject to an annual maintenance fee.
About the Author:
Are you in ChexSystems because of overdraft fees? Read my report on banks that do not use chex systems on Money Galaxy, a personal finance blog I contribute to.
posted by Debt Consolidation Loan at
1:50 PM
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