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5 Tips For Avoiding Overdraft Fees

6 August 2016

Jackie Watts

If you try to purchase an item and do not have enough money in your bank account to cover the cost, you could get charged an overdraft fee. Getting hit with this fee is definitely frustrating and can mess up your budget. However, if you are more careful, you can avoid getting charged with these fees. Here are five helpful tips on how to avoid overdraft fees:

Link Your Checking Account to Another Account

A good way to avoid overdraft fees is to link your checking account to a savings account or line of credit. This way, if you do not have enough money in your checking account to cover a purchase, you can transfer money from your other account and not get hit with a fee.

Sign Up for Online Alerts

If you are concerned about overdrawing on your checking account, think about signing up for online alerts with your bank. If your account goes below a certain balance, your bank will alert you through email. This gives you enough time to put more money in your account and avoid getting hit with overdraft fees.

Do not Use Debit Cards for Small Purchases

Some debit card transactions do not get taken out of your checking account for a couple of days, which can make it difficult to balance your checkbook. This is why you should avoid making small purchases with your debit card. If you want to buy a piece of gum or hand soap, for example, pay in cash.

Do not Sign Up for Automatic Payments

Setting up automatic payments might help be convenient, but they can increase the risk of overdraft fees. If you frequently forget to record automatic payments in your checking book, you are better off paying your bills manually.

Pay Overdraft Fees

If you do get charged an overdraft fee, you should pay it as soon as possible. If your checking account is in the negative for too long, your bank may charge you even more fees. If this is your first overdraft fee, you may be able to talk to your bank about having it waived.

Do not allow overdraft fees to ruin your finances. If you follow these helpful tips, you can manage your checking account a lot better and avoid paying extra fees. Also, do not forget to review your checking account balance every month to make sure there are no mistakes. For more information or other tips, talk with a financial institution like Great Lakes Credit Union.

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