Avoid Wasting Money On Overdraft Charges

January 24th, 2012 | by Alexander Zepps |

Overdraft charges are one of the most expensive bank charges that can be levied against a checking account and cost consumers billions of dollars every year. It has been estimated that nearly 25% of checking accounts experience an overdraft at some point over the course of a year and the fees average around $35 per occurrence. Avoiding overdraft charges is not impossible and by following a few simple tips, you can ensure that no overdraft charges will be charged to your account.

Keep An Accurate Checking Ledger

Keeping track of the amount of money available in your account is the best way to avoid being charged an overdraft fee because you will always know how much money is in the account. All deposits and withdrawals should be noted in the checking ledger, including any purchases made using a debit card, and the ledger should be balanced regularly. Many people choose to balance their checking ledger at the end of every day because it only takes a few minutes of time and it is always up to date.

Add Some Additional Padding To Your Account

Another good way to avoid overdrafts on your checking account is to add two or three hundred dollars to the account that is not reflected in the checking ledger to pad the account. Adding this additional money will come in handy if a paycheck is delayed and automatic payments are withdrawn from the account or if a transaction is missed in your checking ledger. Act as if this additional money does not exist and do not plan to spend it for purchases.

Many banks have added low balance alerts to the services available on their websites. This service sends you a text or email when the balance of your checking account falls below a certain threshold, alerting you that you need to make a deposit and restrict your spending until there is more money in your account. The amount of the threshold is chosen by the account holder when they sign up for the alerts and can be set for amounts ranging from $50 to $500.

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