How can you avoid overdraft fees? 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. 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 to prevent bounced checks and detect possible errors from your checking account.
- Pay with cash. Or use your debit card. Many people forget that they’ve written checks, and then end up spending the money that they needed to cover the check.
- 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 savings account. 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.