Most of us have had an overdraft fee on occasion. Sometimes it is completely unintentional, a mere oversight in your checkbook ledger like forgetting to enter a transaction when you debited something in a rush or going to the ATM for a withdrawal that never gets entered into the checkbook. Other times, you may have had a bill that had to be paid a day or two short of your payday and you mail it, holding your breath as you hope that the company receiving your check uses a different bank than you and it will take long enough to get to your bank that the funds will be there to cover it…a terrible idea certainly, but one that many have been guilty of a time or two.
No matter the reason behind the faulty transaction and no matter if you have overdraft protection so that your bank will cover the check, it is a very wasteful practice, this overdrawing of your account. Overdraft fees have gotten upwards of thirty dollars and at some institutions, they are even higher than that. Add to that the fact that some banks are now charging a daily fee for every day that the account is in the negative and you can quickly have an account that is so far overdrawn that you are in a very poor situation indeed. The most awful part of the whole thing is that you have basically given the bank your hard earned money and received nothing in return.
Clearly, there is no good to come out of paying overdraft fees. You lose money, just as if you simply took it and threw it into the trash can. Especially in today’s rather tight economy, most of us really can’t afford to do that. The following five tips can help you to stop paying these high fees for overdrawing your accounts.
Tip #1-Keep your ledger accurately and current. This seems like a “no brainer” to many, but the fact is that in the fast paced world we are living in, too many people don’t write in every transaction, every time. This is truly the surest way to keep things straight. Online and telebanking has its place, but these methods should not be counted on to give you an accurate balance from day to day.
Tip #2-Round up your transactions to the next dollar as you write them in the ledger. It may only seem like a few cents here and there; you won’t even notice them gone, but they will add up and give you a bit of a cushion if you ever need it. At the year’s end, if you haven’t used the excess to cover things that you inadvertently missed, you will probably be pleasantly surprised at how much you’ve saved.
Tip #3-When you order your checks, get the ones that have the copy paper so that you can recall what checks you have written and what the amounts were. Although you will probably pay more for these checks, it can save you a hefty overdraft fee.
Tip #4-Avoid paying your bills by automatic withdrawal. This can seem like a good idea, for convenience sake, but often, people forget that the amount is coming out of their account and it can lead to one or several overdraft fees.
Tip #5-Attach your savings account to your checking account. Most banks will charge you a fee for transferring the money from one to the other if you need it, but the fee is significantly less than an overdraft fee.
Putting these five tips into regular practice will help you to stop paying overdraft fees. If, however, you do get a fee charged to your account by some error, call your financial institution and explain what happened. Beg for mercy, in other words. Ask them if there is any way that they can reverse the fee. All they can do is say no, but once in a while, they may just surprise you and grant your wish.