Many people keep too little money in their checking accounts. Lots of people still have the mentality that a checking account is for keeping just enough money to pay for what you need. This mindset can result in problems such as overdraft fees, which can be costly and time-consuming.
The following are some tips that will help you avoid these problems:
1. Leave your savings account alone and put all extra money into your checking account. Having extra money in your checking account overnight is a recipe for overdraft fees. If you can’t pay for something when you buy it, wait until you have enough cash to cover it. Otherwise, keep track of your balance so that you know when a $5 latte is going to send you into the red.
2. Don’t let your ATM card get declined because you didn’t keep enough money in your checking account. Consider changing how much money you take out of an ATM every time you use it so that you don’t run out of money at the end of a day. You’ll also want to keep at least one or two cards in reserve for emergency purposes.
3. Follow the bank’s policy for ATM use. In some cases, you might be charged extra fees for using your card at a cash machine outside of your bank’s network. These charges can add up quickly, but there are steps you can take to avoid them. Keep a list of ATMs that are free to use and ATM networks that don’t charge a fee. You can also call your bank and find out how much you’ll be charged if your ATM is not in their network or if it is out-of-network.
4. Review your checking account balance and look for signs of fraud. If an ATM or a merchant mysteriously starts deducting cash from your account, you’ll have an idea of where those transactions originated. If your bank or credit union has online bill pay and check-deposit features, tie your checking account to the account used to pay bills and deposit checks. Then, if out-of-the-ordinary expenses show up on that bill and you don’t know why it will be easy to notice.
A checking account is one of the most vital parts of your financial life. It’s your first point of contact with a bank, and it’s how you pay for things every day. If you don’t take care of your checking account and its primary purpose, you could end up paying a lot of unnecessary fees.
The best way to avoid these fees is to make sure that your checking account is properly funded.