5 Ways to Avoid Overdraft Fees
The average overdraft fee on a checking account is $26 – money that you could undoubtedly use for more important things. How can you avoid this penalty? Follow these tips:
- Balance your checkbook. Keep track of your balance, transactions and automatic payments. And you can always keep tabs on your account online, by phone or at the ATM, 24/7. National Iron Bank offers online banking at IronBank.com and phone banking at 800.461.5566. This monitoring will help you avoid overdraft fees and also give you concrete knowledge of exactly how much money is in your account, which helps you prevent bounced checks and detect possible errors..
- Pay with cash. Or use your debit card. When you don’t make payments with a check, you don’t have to worry about when the payment will clear. Many people forget that they’ve written checks, and then end up spending the money that should have been sitting in the account for the check to clear.
- Create an artificial buffer. Keep a “pad” or cushion of money in your checking account, just to be safe. Decide on a certain amount that will always be in there, and never dip into it. Subtract that amount out of your checkbook so that the balance you see is how much you can actually spend.
- Use direct deposit. Use direct deposit for your paycheck so that you have access to your money immediately.
- Link your checking account to another account. Link your checking account to a money market or a home equity line of credit. That way, if you overdraw your checking account, money will be taken out of the other account it is linked to, preventing a bounced check.