Finance is one of the things that are very complex and we must pay attention to it. If you are not a person who takes a scholar in finance or economics but do you want to have knowledge about finance and economics is it possible? Of course, you can do that! You can study with yourself through the internet for example. On this article, we will provide information about finances that can increase a little more of your knowledge about finance. This time we will share information about 6 ways to avoid overdraft fees. Check out the review below!
Understanding overdraft fees
Before discussing how to avoid overdraft fees? On this occasion we will provide important information to you about the overdraft fees, so you can understand. So, overdraft fees are the amount of withdrawal of funds that exceed the funds in someone’s checking account. Usually, overdraft fees will cause a negative account because the customer writes a check that exceeds the number of funds in his checking account. In accordance with the provisions, the excess withdrawal of funds from the checking account will be considered as debt. However, overdraft fees are determined by the bank, or not if the bank and the customer have a good relationship.
Ways to avoid overdraft fees
After knowing what is meant of overdraft fees, then at the next point, we will inform you about the right way to avoid overdraft fees so you can be free from negative accounts on your bank account. There are so many people who underestimate overdraft fess, overdraft fees do not only happen once but can be many times. To avoid this, then here are some strategies that you must implement :
- Monitor your balance regularly
If you want to avoid overdraft fees, there are several ways you have to do. Because, you might not be aware if you write a check in excess of the funds in your current account savings, and that excess will ultimately cause your account to become negative. The first way you have to do to avoid overdraft fees is to monitor your bank account or do a balance check regularly. To make it safer and also updated, we recommend that you check your account regularly, in order to find out whether your bank account is negative or not, you can check the balance on your bank account every week, or even more often make sure the balance in your bank account is not too low.
Usually, overdraft fees will appear and reduce the balance on your debit card if you make a transaction of $ 24 or less. To find out if your bank account is overdraft or not, you must check regularly. Nowadays, technology is increasingly sophisticated so that to check your bank account balance you don’t need to come to the bank directly. you can check your balance via ATM, or maybe through the mobile banking application on your smartphone, you can also check it via message. For those of you who may be lazy to check, then we suggest that from now on you often check your balances in your bank account so that you can find out whether your bank account has overdraft fees or not.
- Set up a reminder if the balance in the bank account is low
As we all know, nowadays technology is increasingly sophisticated, we can access all things using our smartphone easily. Including to access our bank account, if in the past we had to go to the bank to take care of it, maybe now we can access it from home through the gadget we have. Through technology, we can use to monitor our financial condition, technology sophistication in the banking world can also be utilized to oversee overdraft fees on our bank account. Another way you can do to find out whether your bank account is overdraft fees other than checking your bank account balance regularly is to set up a reminder if the balance in your bank account is low. That can be a warning for you not to spend funds that exceed the balance in your checking account.
Then how do you get a reminder if your balance is low? The first thing you have to do is to ask the bank whether they have a feature to allow you to set up alerts on your cellphone or in your email if the amount of funds in your account is low or has reached the limit you have set? Maybe not all banks can do it, but there are some banks that have this feature so if you can, you can use it. This will greatly facilitate you to avoid overdraft fees because when the balance in your bank account is low, you will be warned by email or on your phone so that it will greatly help you to control your finances.
- Connect it to another bank account
The third way you can do to avoid overdraft fees is to connect to your other bank account. Maybe not many people use this method, but connecting or linking your bank account with others will minimize a little if you have overdraft fees. Usually, some banks will offer transfer services to other accounts to reduce overdraft fees. The way to reduce overdraft fees is to connect a checking account with one another, such as a savings account or a credit account at the same bank. Then maybe some of you will ask, how does this system work?
So if you have linked your bank account with the same bank account and when there is not enough cash in your checking account when you want to complete the transaction, then the money in your current account will be transferred to the account that you have connected or link so the money is enough to cover the transaction. The money in other accounts in the bank is able to cover the lack of money to make transactions. It may indeed cost money, but the costs caused by transferring to your other account are not as large as overdraft fees making, it more economical. But there are some things you should know if you use this one method. That’s, if you link your checking account with another account such as a credit account then you may have to pay more for bank interest, transfer fees, and also the number of overdrafts.
- Transfer or deposit when the bank account has overdraft fees
There are some ways you can do it so you can reduce your overdraft fees or at least reduce the overdraft costs you experience. In addition to the three points above, we recommend that when you have an overdraft fee on your bank account, you must immediately deposit or transfer money in the account. When you find out that your balance in your bank account is low and that will trigger overdraft fees, you can actually prevent overdraft fees. How to prevent this? The first way is to ask the bank whether the bank has a daily deadline or time limit to add money to the account to make corrections to the negative balance in your bank account on the same day so you can avoid overdraft fees that you experienced.
We recommend that if you experience overdraft fees, from now on, immediately ask the bank whether you can deposit or transfer the same day. If you can, then we recommend that you do it immediately because it can help you to prevent a negative balance in your bank account. You can not ignore this because this is a very important thing. Because if you allow overdraft fees or a negative balance after a few days in your bank account, it can cause overdraft fees to be extended and can turn into a large debt. Therefore, we recommend that you do several ways to overcome or prevent overdraft fees.
- Make a prepaid debit card
Overdraft fees are one of the negative costs that must not be avoided because if we leave it, it can cause us to suffer losses even as we mentioned above if overdraft fees can cause debt to arise. The fifth way you can do what we mentioned earlier is to make a prepaid debit card. This can be an effective way for those of you who continue to experience problems related to overdraft fees in your account. Then maybe some of you have questions, what are the uses of these cards?
Cards such as the prepaid debit card that we discussed above were very useful for you because they have a function to save, attract, and also spend your money. However, this prepaid debit card is not connected to your checking account. In addition, what you need to know is that this prepaid debit card usually does not have overdraft fees or other related fees, but this prepaid debit card can incur costs for rejected transactions. Therefore, we recommend for you to make a card or a bank service that uses a small additional fee that can provide services in accordance with what you need.
- Know your financial budget and plan it properly
The next step that can help you to get out or avoid overdraft fees is knowing your financial budget and after that, you can plan it right. Maybe it sounds really simple, but keeping track of our cycle or financial budget regularly (every month) can help us to prevent the cost of spending from budget swelling. Therefore, for those of you who might not pay attention to your finances now, from now on we recommend that you start paying attention to it because it can also help you to avoid overdraft fees.
In addition to knowing what your financial budget is every month, you also have to plan your finances properly. For example, for those of you who have bills every month, so you can avoid overdraft fees, we recommend that you set up bill payments automatically because it can help you avoid the hassle of sending proof of payment or physical checks that might be at risk of being lost. For people who have businesses with fairly tight financial budgets, overdraft fees are one of the high costs for short-term loans. One smart solution that can help you to be free of overdraft fees is to register a credit card with a low-interest rate, but we recommend that you use this method only when there is an emergency.
That was some information that we can tell you about 6 Ways to Avoid Overdraft Fees. Hopefully what we share this time can be useful for you to avoid overdraft fees!
