Almost everyone has faced an overdrawn bank account at one point or another, and when this happens, it can be frustrating and embarrassing. Most of the time accounts become overdrawn by accident. Forgetting about a bill that’s set to automatically come out or failing to realize extra charges were added to a bill are both common ways in which you can face an overdraft.
Overdraft Fees and Protection Unfortunately, many commercial banks charge overdraft fees to cover overdrawn accounts. While overdraft protection is a good thing in that it covers charges when there isn’t enough money in an account, most banks charge a fee for this service. In fact, you may receive a charge for each separate incidence of overdraft protection, and these can add up quickly. Set Up Automatic Alerts One way to avoid overdraft fees is to use banking apps that automatically alert you when your account balance reaches a certain amount. Using this method, you are less likely to be caught off-guard if your balance is getting low and you need to make a purchase. Opt Out of Overdraft Programs You can also talk to your bank and see about opting out of overdraft programs that cover bills. While this removes coverage for overages, it also eliminates the potential for receiving overdraft fees. Additionally, it might help you to change the way you budget and manage money since you’ll know that you no longer have a safety net in place. Have Emergency Savings Available It’s always a good idea to save money, but you might be able to work with your bank to have a separate savings account specifically for protection from overdraft fees. This account can contain a small amount of money that automatically gets deducted in the event of an overdraft. This eliminates the potential for fees, but you’ll need to remember to replenish this account if it ends up getting used. Also, your bank may charge a maintenance fee for this separate account, so it might not be a totally free method of avoiding overdraft fees. If you are looking for a buy now pay later app, visit this website.
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AuthorEmily Clarke writes about cash advances, overdraft protection & finance apps. ArchivesCategories |