Avoid Overdraft Fees
Did you know the median overdraft fee on a checking account is $26? Here are steps to take to avoid this penalty:
1. Don't trust your "Available Balance." Many financial institutions engage in a practice where they will reflect a direct deposit in your "Available Balance" but will charge overdraft fees on any transactions that occur prior to the deposit actually posting. Any purchases that are made which exceed the previous running balance during the time BEFORE the direct deposit actually posts will result in overdraft charges even though the bank shows the funds as available.
2. Balance your checkbook. Not only will balancing your checkbook help you avoid overdraft fees, but it'll also give you a firm knowledge of how much money is in your account, which helps you prevent bounced checks and detect errors from your bank.
3. Pay cash. Or use a debit card. When you don't pay with a check, you don't have to worry about when the payment will clear. Many people forget that they've written checks, then spend the money that should have been sitting in the account for the check to clear.
4. Create an artificial buffer. Decide on a certain amount that you will always have in your account, and never dip into it. Subtract it out of your checkbook so that the balance you see is what you can spend.
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