It used to be that if you did not have enough money in your account, your bank would decline your ATM or debit card transaction. It is becoming more common, however, for banks to accept the charge and then slam you with overdraft fees, often reaching $30 to $40. Do this several times in one day, and you can see hundreds of dollars in fees.
To add insult to injury, banks and credit unions often market this as a service, calling it "bounce protection" or "courtesy overdraft." But they will accept these charges without any warning to you, leaving you to deal with the fees that can pile up.
If you are one of many consumers who often have a low balance in your checking account or who don't balance your checkbook, you are at particular risk of incurring these fees. You can take some simple steps to keep your account overdraft fee-free.
Because of new federal regulations, checks can clear almost immediately. You cannot count on floating checks anymore. To control better when money leaves your checking account, consider using online bill-paying. You can set the specific date for your payment to leave your account. Also, remember that ATM and debit card payments will typically post the same day. However, when using your debit card as a credit card, payments can still take a day or two to post.
While debits are processed relatively quickly, deposits can still lag when posting. Banks often put multi-day holds on deposits, especially in the case of large deposits. You cannot count on a deposit being available until you actually see it posted to your account.
If you use your debit card for hotels, rental cars or gas purchases, you may also find that a portion of your available balance is tied up in "holds" placed by these companies to ensure payment of your bill. Often these holds are several hundred dollars, with this money unavailable until it is released by the company. Using a credit card is a better move.
You can protect yourself from bouncing payments by keeping a small cushion in your checking account. You may decide that you only need $100 to $200 to keep this from happening. By keeping away from a zero balance, you will ensure that any surprise expenses won't push you over the limit.
Many banks also now offer alert services. These are notifications that can be sent to your email or cell phone notifying you when there is activity on your account. You may be able to request alerts when your account falls below a certain level, letting you deposit money before you make any more purchases.
You can also request that overdraft protection be removed from your account. This way, any transactions you attempt that would be more than the amount available in your checking account would be declined instead of processed. You will still have to refrain from writing checks with no money in your account, as merchants can charge fees for returned checks as well. But removing this service will keep you from having any surprise charges.
It’s not unfair for us to say that life will never be better than when you’re living at Heights at La Salle Apartments in Durham, North Carolina! To further improve your day-to-day routine, we bring you these lifestyle-enhancing tips that will help you revamp your lifestyle in a variety of ways.