Eliminate Fees From Overdrafts And Bounced Checks
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.
Your transaction puts your bank in a position where it has to decide whether whether or not it's going to pay the amount. Either way, the bank will assess you a fee. If the amount is paid for although you didn't have enough funds, the bank will assess you an overdraft fee. In case the bank decides that the check should be returned unpaid, it will assess you a bounced check fee.
You can certainly eliminate such fees if you do what you need to do to manage your bank account properly. That means doing your best so that your account does end up with a negative balance by keeping track of how much money you have available at all times. It's suggested that you register your transactions as they happen. You should also keep tabs on any bank fees so that you record them too.
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.
Review your account statements each and every month. Between statements, finding out which payments have cleared is as simple as calling your bank to get your current balance, checking it online, or getting it from an ATM (assuming that you won't get charged just for checking).
In the unfortunate case where you account is negative, make it a priority to deposit some money into it so as to have a positive balance once again. The bank will deduct its overdraft fee from the account, so keep that in mind when determining how much to deposit. At this time, you might also be offered other ways to cover any future overdrafts.
Most likely you will get to choose one of those options. You can either link a savings account of yours (at the bank) to your checking account, or apply for an overdraft limit of credit with the bank. In the first case, every time there is a transaction that would result in your checking account being overdrawn, funds are automatically transferred from your savings account to prevent that. In the case of the line of credit (which you will have to apply for and will be treated as a loan application when it comes to eligibility), your account will be allowed to operate with a negative balance, up to your credit limit. That balance will generate interest, and the credit 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.
Your transaction puts your bank in a position where it has to decide whether whether or not it's going to pay the amount. Either way, the bank will assess you a fee. If the amount is paid for although you didn't have enough funds, the bank will assess you an overdraft fee. In case the bank decides that the check should be returned unpaid, it will assess you a bounced check fee.
You can certainly eliminate such fees if you do what you need to do to manage your bank account properly. That means doing your best so that your account does end up with a negative balance by keeping track of how much money you have available at all times. It's suggested that you register your transactions as they happen. You should also keep tabs on any bank fees so that you record them too.
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.
Review your account statements each and every month. Between statements, finding out which payments have cleared is as simple as calling your bank to get your current balance, checking it online, or getting it from an ATM (assuming that you won't get charged just for checking).
In the unfortunate case where you account is negative, make it a priority to deposit some money into it so as to have a positive balance once again. The bank will deduct its overdraft fee from the account, so keep that in mind when determining how much to deposit. At this time, you might also be offered other ways to cover any future overdrafts.
Most likely you will get to choose one of those options. You can either link a savings account of yours (at the bank) to your checking account, or apply for an overdraft limit of credit with the bank. In the first case, every time there is a transaction that would result in your checking account being overdrawn, funds are automatically transferred from your savings account to prevent that. In the case of the line of credit (which you will have to apply for and will be treated as a loan application when it comes to eligibility), your account will be allowed to operate with a negative balance, up to your credit limit. That balance will generate interest, and the credit 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 Credit Counseling at
1:50 PM
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