How to Stop Overdraft Charges

If you often find yourself using your debit card or writing checks to the point that you’ve overdrawn your account, the mistakes can result in costly overdraft fees. In addition to adding another payment to your list of debts, the record of overdraft charges may affect your ability to qualify for a bank or car loan in the future. There are simple methods to change your accounts and habits to avoid overdraft fees, however. Consider these tips to stop overdraft charges.

Difficulty: Moderate

Instructions

1. Stop overdraft charges by removing the bank overdraft protection feature from your accounts. Designed to allow you to continue to use a debit card or write checks despite the fact that your account is overdrawn, the overdraft fees for each transaction can range from $25 to $35 each, depending on your financial institution. Without the overdraft protection, however, you’ll need to keep tabs on your account balance since purchases will be rejected if you don’t have enough funds.

2. Consider a different form of overdraft protection that allows you to link a secondary savings account to your main account. If the first is overdrawn, funds will be taken from your savings account to make up for it. Although this will stop overdraft charges, be sure to inquire about any monthly service fees or penalties that you might have to pay if you dip into the second account, however.

3. Ask your bank’s customer service representative if they offer a warning service that sends you an email or phone message if your savings or checking account balance falls below a certain level. If you do receive such an alert, be sure to let other ATM or debit card holders on the account know so they won’t continue to make purchases or withdrawals that will result in overdraft fees.

4. Use the “balance inquiry” function at the ATM if your bank offers it. This is a simple way to stop overdraft charges since it allows you to confirm the current amount in your account before you make a withdrawal.

Tips & Warnings

• If you’ve been paying a lot of service fees for overdrafts lately, stop overdraft charges by keeping more meticulous bank balance records. Force yourself to record every withdrawal and debit card purchase in a notebook or your check register and instruct other cardholders to hand over their receipts and bank slips daily. Letting even one or two ATM withdrawals slip through the cracks, for example, can result in overdraft fees if your account balance is low.

[yummymummy007]

on 8/1/2009 I'm very upset. We have very little money and the bank has found a way to have slaved us for life. Instead of paying for food, gas, utilities this month, I paid over draft protection fees first. They had already taken over $400 dollars because a merchant repeatedly charged my account for the same charge. The bank says it’s my fault for agreeing to buy something for $5 online from a merchant. The bank won’t give me back the overdraft fees and say I need to sue the merchant. The merchant says it won’t pay the fees and the bank should simply give me the money back.

The result is that some of my utilities to my home are cut. I am so sick I can’t explain it. I had plans tomorrow to have fun with my kids and simply celebrate by eating with them but I just checked my bank statement and learned that I just got hit not with one but two additionally overdraft fees. What type of company can do...