Don’t count on your debit card or check being rejected at the register when you don’t have enough money to cover your purchase. Quite frequently, you can walk out of the store with not only your purchase, but an account that’s now in the red and an overdraft fee from your financial institution. As long as you can afford to pay the overdraft fee, it’s no problem, right? Wrong. If you consistently overdraw (spend more money than you have in your checking account), there’s more to worry about than fees.
Keep track of your account balance throughout the month with these tips:
Sign up for online services with your financial institution and check your balance daily over the Internet.
Always look to see if your previous checks have cleared–your balance may actually be less than it appears.
Keep a small notebook or register with you and write down all of your purchases, automatic payments and cash withdrawals.
Keep receipts in case there are any errors or disputes about purchases later.
Make sure your records and account information match. Even financial institutions make mistakes and you shouldn’t pay for them.
Accidents happen. Set up a safety net, so you’re covered if you do overdraft. Ask your financial institution about:
Linking your savings account to your checking account. When you overdraw, your savings will cover the amount. Charging a credit card to avoid an overdraft. Use this only as a back-up or you could rack up significant debt quickly. Securing a line of credit, like a personal loan. Always read the fine print because some of these loans have exorbitant interest rates.