How to Avoid Overdraft Fees
If you opt into overdraft protection, you can pay for a transaction that exceeds the balance on your debit card or checking account but will have to pay an overdraft fee. Here’s a closer look at what overdraft fees are and what you can do to avoid them.
What is an Overdraft Fee?
If you have insufficient funds in your account, your bank may still allow you to withdraw money or complete a transaction. The price you’ll pay for overdrawing money from your account is known as an overdraft fee. While overdraft fee amounts depend on your bank, they often cost around $35 per transaction.
How You Can Avoid Overdraft Fees
There are a number of ways you can avoid overdraft fees, including:
Don’t Opt Into Overdraft Protection
If you opt out of overdraft protection, you’ll get declined every time you exceed your balance. While this may be inconvenient or even a bit embarrassing, this could be a better option than being charged with expensive overdraft fees.
Monitor Your Account
Try to check your account every day or week. This way you’ll know when your balances are low and you need to watch your withdrawals or spending. You can check your balance online, via mobile app, by phone, or in person at your local bank.
Get Online Alerts
Most banks offer low balance alerts. You can sign up for them and get an update every time you’re at risk of overdrafting your account. You’ll likely be able to set a certain threshold and get notified via text or email every time your account balance gets below it.
Set Up Automatic Payments
Set up automatic payments for your rent, mortgage, utilities, car loan, and other bills. You can specify the exact days you’d like to make these payments. By going this route, you’ll write less checks and won’t be surprised when money leaves your account.
Look at Your Bank’s Overdraft Practices
Every bank has its own set of overdraft practices. Be sure to familiarize yourself with those at your bank. If you’re unsure about something, don’t hesitate to ask. This way you can avoid confusion and unexpected charges.
Save Some Extra Cash Each Month
If possible, add a small cushion of cash to your account. An extra $50 to $100 each month can help you avoid these costly fees. It can also give you some much needed peace of mind.
Contact Your Bank If You Overdrew By Accident
In the event you do overdraw your account by accident, reach out to your bank and explain the situation. If you’ve been a loyal customer and have proven that you are responsible with your finances, they may forgive you and waive the fees.
Advance America Can Help You Avoid Overdraft Fees
If your account balance is running low and you need to cover an expense, Advance America can help. We offer a variety of loans such as payday loans and installment loans that can give you the funds you need the same day. You can apply in store or online from the comfort of your own home and get approved, even if you don’t have great credit.