How Bank Account Overdrafts Happen and How You Can Fix the Damage they cause
There aren’t many people that set out to have problems with their bank accounts. Truth be told, we’d all like to always have plenty of money in our accounts, and all of our bills paid on time. And we’d sure like to avoid paying any excessive fees to our banks for overdraft fees. Being that debit cards are a great solution for people who want to stay on track with their finances, it is puzzling why so many debit card users wind up paying overdraft fees. Some people even end up paying these expensive fees month after month.
If you’ve ever found yourself staring down a pricey overdraft fee from your bank, you know how painful this situation can be. Money is tight for a lot of folks these days, and most people don’t have an extra 30-something dollars to pay out to their banks all the time. An overdraft occurs when you don’t have enough money in your bank account to keep up with the costs of your expenditures. We’ve all been shot on cash before, but even those people with very low credit scores can often get a personal loan that is more affordable than overdraft fees.
If you are still bummed out with how frequently you have to deal with overdrafting your bank accounts, you are probably looking for ways to avoid overdrafting in the future. Some new regulations that are in place may help you to get some much needed flexibility with regards to how your charges are handled once your account is down to zero dollars. What follows is information about how overdrafts occur and how to recover from them once they do.
Not tracking your expenditures properly
There are less and less people writing checks these days. With that concept firmly in mind, the traditional bank ledger has quickly become dated. Because people are no longer keeping their checkbooks balanced on a daily basis, it is easy to understand how folks get off track. A gas fill up here, and a little purchase there can all add up to too much for your bank balance to cover. Track your daily purchases in order to avoid overdraft fees that occur when you forget to keep your bank account perfectly balanced. Even if you have to go online before bed each night, it pays to stay on top of things.
Recurring charges sometimes happen early
Paying bills automatically can be beneficial, as you don’t have to keep track of when to make a payment. These types of payments are deducted from your bank account automatically. Usually, the creditor will even tell you which day of the month your payment will take place. Remember, though, that holidays, weekends and technological glitches can cause these payments to be taken out of your bank account earlier than you anticipated. If you are not on top of things, and don’t have adequate money in your account, you could wind up with an overdraft fee due to an early automated bill payment. Know when all of your payments are due, and check the calendar to be on the lookout for any potential gotcha’s that might cause you problems.
These are just a few of the things that you need to be aware of that can cause you major financial headaches down the road. The real secret is to always know exactly how much you have in your account, how much you have spent and when any recurring charges are going to take place. Armed with this basic knowledge you can avoid paying expensive overdraft fees to your bank (which is probably already charging you too much for its services anyway…)
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