How to Use Online Banking To Avoid Overdraft or Insufficient Fund Fees

It is time to use online banking to keep a close eye on your checking account and avoid overdraft or insufficient fund fees. Banks are now “stacking” your checking account charges. It doesn't matter if you write a check or use a debit card. This process called "stacking", means they shuffle the charges around and place the largest amounts on the top to be paid first and the smaller purchases last. Therefore, if the larger payment means you now can't pay two of the smaller purchases, the bank charges you 2 overdraft insufficient fund fees instead of 1. Learn how to use online banking to avoid overdraft or insufficient fund fees.

Difficulty: Moderate

Instructions

Things You'll Need:

• Checkbook
• Checkbook Registry
• Pen
• Calculator

1. Stop over spending and avoid overdraft or insufficient fund fees. Check your checking account balance and write the amount of money available in the account in the "balance" column of your check book registry. This is usually the last column in the registry. Log on to your online checking account to see what your balance is, what funds have cleared and how much is left and record that in the checkbook registry.

2. For each automatic debit that is scheduled to be deducted from your checking account per pay period, enter the amount into the checkbook registry and subtract it from the balance immediately. For example, many people set their mortgage payment up as an automatic debit. Enter that amount in your checkbook for each month or pay period, as applicable.

3. 
   Enter withdrawals in your registry

   For all charges made, be it by check, internet purchases or ATM debit card, immediately record it into the checkbook registry and deduct it from the balance in your checkbook registry. Even if it's just a soda pop from the vending machine. If you use your ATM Debit Card or wrote a check, remember to enter that in the registry and subtract it from the balance.

4. Check the balance in your checkbook registry before making a purchase. If you don't have the money in the account, don't make the purchase. It is imperative to stop making purchases once your checkbook registry balance indicates no more funds are available.

5. If you knowingly exceeds your checking account balance, consider minimizing the damage by immediately adding money to the account. Paying NSF fees is wasting money and I wholeheartedly discourage it. However, I realize people end up in a financial crunch and over spending occurs. Try not to make it a habit or way of life.

6. Consider borrowing from a friend or family member. If you find yourself needing a few dollars for an emergency you've been unable to save for like car repair or gas, try to borrow from a family member or friend (the key word here is 'borrow' as in pay it back!). You should consider this option especially when the NSF fees are going to surpass the amount you wanted to borrow. If you only need $80, does it really make sense to pay the bank $140 for not having it when you could have gotten it from a friend or family member?

7. 

   Sell items you no longer need or want to a pawn shop. Work at home making money online writing articles for EHOW or similar site. The extra money from your home-based business will help with those emergencies that tend to pop up.

8. See the resource section for a link to eHow writer Hayden Gerson's article titled How to Get Overdraft Fees Refunded.

Tips & Warnings

• Scenario: If you have 100 dollars in your checking account. You make four 25 dollar purchases. An automated debit for $80 dollar is processed after your four $25 purchases. The bank will bump up the $80 purchase, pay it first, and charge you four insufficient fund fees (instead of 1) for the other $25 purchases. Therefore, where you would normally have paid one $35 NSF fee for the $80 that was not in the account; you will now pay four insufficient fund or overdraft fees.
• The average person who ends up with a negative checking account balance do so because they forgot about an automatic debit that was authorized months (some time years) ago. Stay away from granting creditors automatic debit privileges. Use online banking and setup reminders to let you know the payment is due and when it was sent.
• Maintain a registry and keep a current balance of your available cash.
• Do not spend money you do not have in the account.
• You the consumer is how the banks make their money. Each time that you overspend and the bank charge NSF fees, you are giving the bank free money.

Resources

• How to Get Overdraft Fees Refunded
• How to Calculate Your Net Worth
• How to Get the Mortgage Deal You Want
• How to Prevent Foreclosure if You Are Having Money Problems

[MIghtyDreamer]

on 2/4/2009 Good online banking detail and now something we are in some cases being forced to do unless we want to have yet another fee to get hard copy transactions

[2enjoylife]

on 1/12/2009 Sound advice for using online banking to avoid fees. You especially give good information about "stacking." Thanks!*****

[Susang6]

on 12/21/2008 Great article with useful tips on how to save money. One needs to check their bank acounts daily, and online banking makes it easy to do!

[Diligent77]

on 12/14/2008 Always looking for ways to save money. Thank you for this article. It helps me to realize the importance of paying attention to the little things before they become big things. 5* and a recommendation. Well I tried to give 5*

[laurie1979]

on 8/8/2008 Thanks for this article too. I enjoy reading it and I have been sharing about this opportunity with others that are in a money crunch for the time being. Keep writing up more articles like this.