What if I overdraw my checking account?
Having a checking account is about as common as owning a pair of shoes. With a debit card and checks, it’s easy access money, 24/7. Most employers can now send your pay check directly to your bank, allowing the funds to be available almost immediately. But be careful. The convenience of a debit card can lead to problems if you aren’t paying attention to the balance. It’s easy to lose track of your balance and overdraw the account. With the overdraft comes charges and daily fees. You can easily spend double for your groceries! Here are some ways to help you avoid overdrawing your checking account:
1. Use a check register! A check register helps keep you up to date with money coming in and out. Keep track of your money that may not have been processed through the bank yet or other fees like ATM fees. This will help you see where every dollar is going.
2. Overdraft protection can be set up by being linked to a savings account, line of credit or credit card. You may pay a small fee for using this service, but it guarantees protection if you over draw an account, saving potential overdraft fees.
3. Online Banking! Most financial institutions are set up with online banking services. There’s no excuse to NOT use it, especially if you’re too busy to reconcile your account monthly. Using this service allows you to track your balance throughout the day, showing up-to-the-minute balances. Some financial institutions alert you by phone if a balance gets too low.
4. Contact Your Bank/Credit Union – Old fashioned? Call your bank to get an accurate balance. However, some banks (not credit unions) may charge you to speak to a live officer!
It’s important to maintain a healthy history with your financial institution. Repetitive overdrafts can cause a debit card to be blocked or canceled, and possibly result in your account being closed. If you ever need a loan, your financial institution will use your account history as a means to approve or deny you. The cleaner your history, the greater your chances of being approved. Some banks also report overdrafts to credit bureaus, resulting in a decrease in your credit score.
At SourceONE Credit Union, our checking accounts come equipped with checks, debit cards and overdraft protection. We offer online banking with 24 hour access to your balances. Or, if you feel like calling, a live person is available during regular business hours to assist you. Visit our website for more information.