Overdraft fees can be a huge pain, with the average overdraft fee in the U.S. at $36. The good news is that you can avoid them—and start saving money immediately—by following a few simple steps.
Don’t opt-in to overdraft coverage on your ATM or debit card
The next time you go to the ATM, do not opt-in to overdraft coverage on your debit card. Doing so will allow the bank to charge you a fee for every transaction that puts you over your limit and results in an overdraft. If you don’t opt-in and have no money added to your account, then no overdraft fee will be charged to you (except if they decide not to honor their own rules).
Turn notification settings on for important financial accounts
You should turn notification settings on for important financial accounts, such as your bank account, credit card accounts and mortgage. These notifications can help you avoid overdraft fees.
- Go to the app or website of the financial institution that holds your account.
- Navigate to the “Notification Settings” tab (if they have one). If they don’t have a notification setting tab, go to their “Account Settings” page and find where it says “Email Alerts” or something similar—it should be near the bottom of your list of options.
- Select which types of alerts you want turned on—for example, if you want texts sent every time there is an activity in your account but not emails (or vice versa), this is where you can choose that preference for yourself!
Pay attention to reminders and alerts
In addition to monitoring your account balance regularly, you should also pay attention to alerts and reminders. For example, if you have a savings account that has a debit card and an overdraft protection line of credit linked to it, make sure both are set up so that the bank will automatically transfer funds between the two accounts when one goes into the red.
If not, when you go over budget on your debit card and still have money in your savings account (which is often), it could take days for someone from customer service or online banking to manually process a transfer request after which point they could charge you an overdraft fee.
According to SoFi professionals, “You shouldn’t be charged if you accidentally spend more than you have.”
Record all transactions in a check register or mobile app
If you have overdraft protection, it’s important to record all transactions in a check register or mobile app. If not, then you will be charged an overdraft fee every time your account goes into the negative. Even if you don’t have overdraft protection on your account, keeping a record of all transactions will help prevent accidental overspending and ensure that you don’t accidentally spend more than what’s in your account.
Remember, your bank is an important financial resource. As long as you take the right precautions, it can be a valuable asset to any family or individual. The most important thing is to be proactive and know what fees are out there so that you don’t get caught off-guard when they happen!
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