How to Avoid Being Charged Overdraft Fees

Once your bank account has suffered a negative balance due to anything other than a system complication, financial institutions penalize account holders with a charge otherwise known as an overdraft fee. Though this fee varies, it is frustrating and can easily mess up your budget. For financial freedom seekers, eliminating potentially disasterous overdraft fees is the key to gaining control of finances. Luckily, doing so is far from complicated.

Instructions

Difficulty: Easy

1. # Understand Your Financial Institution
   Each bank has policies enforced by federal law as well as self-established guidelines of their own. If asked, they will not hide answers to these questions from you. In fact, they usually explain the guidelines when you open your account.
2. # Since this is the bank you're trusting your money to, you might consider learning about what is happening to it! However, in between all of the rush, many account holders neglect to educate themselves on the basics. If your account requires special features, you may be accepting monthly fees in $3 or $10 incriments unaccounted for in your budget. These small differences can determine a loss of income to wasted overdraft fees. Plus, it's just good sense to know what's being automatically deducted from your account.
3. # Think before you spend
   As a consumer, you make purchases almost every day. Whether you budget or not, you still have a rough idea of how much money is sitting in your bank account. Before you decide to risk swiping your debit card for that instantly gratifying purchase, ask yourself two questions:
   
   * How much money am I going to have afterwards?
   * How much money am I going to need afterwards?
   
   Don't let your dinner date or new outfit cost you an extra $33 in fees on top of the financial stress you may be causing yourself in the process.
4. # Keep Your Peace of Mind
   Aggravating fees that are charged, so as to make your banking institution more money can throw you off balance. The next time you're out flashing plastic, do not forget why you're trying to avoid those overdraft fees! It's not just so you can pay your bills on time, it's so you can focus your attention on more important things then going over your budget.

Tips & Warnings

• Many Institutions offer online banking where you are able to view your account, pay your bills, and balance your account. This service is usually free, or has a small charge, but it is worth it. You can check your balance every few days, and make sure you have enough money to buy your next purchase.
• If you have a good account history with your bank, the bank might, out of courtesy waive a limited amount of overdraft charges for you,
• Aside from automatic debits from your bank account, the most common cause of overdraft fees comes from the use of your bank's debit card. If you find yourself excessively draining your account, you may want to dispose of your card until you can gain control of your situation.
• Why not be a good teacher and take your children to the bank with you? Help them open a savings account of their own, which you can manage together. The expensive lessons you've had to learn about cutting back overcharges, can help them avoid them in the future.
• Fighting with the bank teller and refusing to pay your overdraft charges is not a way out of this situation. A governing system among U.S. banks, known as Chex Systems, monitors account holders and any customer who leaves a negative balance in their account for longer than thirty to sixty days is automatically charged off and reported. Your account will not only be closed, but you may take up to five years re-establishing your credit before another bank will take you in. Not to mention, you'll still owe the money!