While fees for debit card use and monthly
service charges act as a hindrance on your regular spending habits,
overdrafts and bounced checks (also called non-sufficient funds) are
probably the worst type of fees to come across for your checking
account. These types of fees can stack up and are heftier when compared
to other checking account fees. Here are 10 tips to help you avoid
overdraft or bounced check fees on your checking account:
1. Keep Track of Your Automatic Payments
Automatic payments are a convenient way of avoiding late fees on your
monthly bills, but can lead to overdraft or bounced check fees if you
aren't keeping track of them. Make sure you take note of when these
funds are typically withdrawn from your account since processing times
may vary between months. If anything, make sure you leave money in your
checking account as padding room for 2-to-3 days during your billing
cycle.
2. Stop Floating Checks
At one time, a person could write a check for a bill or payment and
expect the funds to be removed from his or her checking account within
2-to-3 days, sometimes longer. This would allow people to meet payment
deadlines with money they did not have, giving them several days to
either come up with the money, or wait for a paycheck to clear. With the
advances in technology, a check's float time has either minimized or is
non-existent, especially with online check deposits.
3. Be Careful With Joint Checking Accounts
If you share a joint checking account with someone like your spouse,
make sure you are both keeping track of the account balance, automatic
payments and spending habits. If you know it is grocery day and your
spouse typically spends $100 at the market, make sure you don't deplete
the necessary funds by paying a bill or making a purchase in the
meantime.
4. Wait for Deposits to Clear Before Using the Cash
Until a deposit has actually cleared and appears in your account
balance, do not try to spend it. This is the same concept of floating
checks, only reverse. Until you can clearly see the money in your
checking account, don't assume it is already there.
5. Get Mobile or Online Alerts
Mobile or online alerts aren't just for protecting your checking
account from theft or a stolen identity; they are also good for helping
you manage your account balance. Online alerts can be checked while you
are at home or the office, and mobile alerts work just like a text
message. Set up alerts for upcoming automatic payments so you can
double-check your account balance before a payment goes through. Alerts
are also a good way to notify you when your balance is below a set
minimum to help you avoid an overdraft or bounced check fee.
6. Review Your Checking Account Balance Regularly
Some people have the idea that they can keep track of their account
balance in their head without having to actually look at a monthly
statement. While this may work for some, it's quite a difficult task for
most people to track all of those automatic payments, written checks
and debit card transactions. Remember, even if it's only by a few cents,
you can incur an overdraft or bounced check fee if you aren't careful.
7. Always Have Some Cash Handy
Many people keep $20 or even $100 on them for emergencies. This is a
great way to avoid an unnecessary charge if you find yourself in an
emergency situation. The last thing you want is to have to run to a
non-bank ATM and incur a fee from both the ATM machine and your bank,
which can affect your account balance and lead to an overdraft or
bounced check fee.
8. Be Mindful of Establishments that Place Holds on Your Debit Card
If you use your debit card to reserve a hotel room or to rent a car, a
hold can be placed on your card. Sometimes, people forget these funds
might not be available, thinking their checking account balance isn't
going to be affected until they've actually checked out of the hotel or
returned the rental car. But, a quick scan of their account balance will
tell them otherwise.
9. Link Your Checking Account to a Savings Account
Some banks offer overdraft protection in the form of linking your
savings account to your checking account. If you ever use your debit
card or write a check for a payment with money that you don't have in
your checking account, your savings account will be automatically
deducted to avoid overdrafts or bounced check fees. Just remember, there
may be a service charge for the money transferred.
10. Get in Touch With Your Bank
If you aren't making these mistakes regularly, and you settle your
account balance, you may be able to have the overdraft or bounced check
fee waived. Give your bank a call and try to remain calm and courteous.
The experience may be unsettling, especially if you've incurred heavy
penalty fees, but lashing out won't help the situation.
