3 easy ways to avoid costly bank charges

Sep

3

3 easy ways to avoid costly bank charges

Being nickeled and dimed with incidental charges by your bank can be frustrating. In addition to those small fees being hit with high overdraft fees is even worse.

According to Business Insider small fees and overdraft charges are 2 of the top 5 things causing customers to switch banks in the U.S.

Stay on top of costly mishaps by trying these three strategies.

Know your overdraft options

Chances are you use a debit card for most of your everyday banking needs. Did you know that debit card purchases lead to more overdrafts than any other type of transaction?

Knowing whether or not you are opted-in or opted-out of overdraft coverage at your bank is important.

You can actually limit overdraft fees you pay by opting-out of coverage. Opting-out of an overdraft program means your financial institution will not allow small debit card purchases that cause big overdraft fees. Just keep in mind that your purchase will be declined at the store.

If you choose to opt-in your bank will allow those debit card purchases to go through, and then hit you with numerous overdrafts fees.

Use tech to your advantage

It’s 2019 and every financial institution has online banking or a mobile app. Make sure you are checking your account balance on a regular basis. Take advantage of low balance alerts offered by your bank. They will notify you by email or text when your balance drops below a certain amount.

Ask your bank if they offer overdraft protection. This would link your savings account to cover a transaction from your checking account. If they do there will most likely be a fee, but it should be way less than an overdraft fee.

Consider a prepaid card

If it’s really hard for you to avoid overdraft fees by keeping a positive balance in your account, another option is a prepaid card. The good thing about prepaid cards is they are easy to get and you can use them pretty much anywhere.

There are still some fees associated with prepaid cards, so make sure to do a little research to find the best one. Here’s a list of several good choices from nerdwallet.