Overdrafts are a friend to no one, especially your bank account. Everyone has faced an overdraft at some point or another but it’s easy to fall into habits that make them a recurring problem. If you’re hoping to makes some changes and prevent the fees from piling on, take a look at a few helpful tips that could save you heaps in the future.
- Stay Away from Automatic Payments. While automatic payments are a very convenient option for those who find it easy to let a bill slip through the cracks, it’s just as tricky to remember when your payments are scheduled. Try to stay away from automatic payments if you can help it as they can come through when you least expect them and wreak havoc on your bank account balance. Leave your payments set as manual and so you have the option of paying late rather than overdrawing your account. If your payment comes due and you don’t have the funds to cover it, search for other options like the payday loans offered through the wonga website. You can choose the length of time you’ll need the funds for and the faster you pay it off, the less you’re paying in interest. The fees associated with short-term loans like these are often less expensive than the per item charge you’ll receive if your account goes negative.
- Set Up an Overdraft Account. Most banks now have options for overdraft service like a line of credit attached to your account that is automatically charged when your account falls below zero. Some also allow you to link your savings account so the funds can be taken out automatically in cases when a bill slipped your mind. This can be a dangerous strategy if you don’t make it a habit to check your balance though, seeing as your emergency fund is being used to take care of business. You run the risk of wiping out your fall back method when things get tough.
- Don’t Opt In to Overdraft Service. New changes to the banking world are going to be making overdrafts significantly more costly, which makes it even more important you understand what’s available to you. Ask your bank to decline your transactions when you don’t have the money available, instead of letting you swipe away your debit card to your heart’s content. If you know yourself and know you can’t be trusted to keep an eye on your balance, don’t leave it up to chance. Some banks automatically opt you into their overdraft service, meaning your card will allow you to spend more than you have for dire situations when you need something and don’t have any other options. But overdrafts generally do more harm than good and if your bank can prevent those fees from snowballing by simply stopping the transaction, you may be better off.
You may not even realize that some of these are options, which is why speaking to your bank may help you get a better idea. But with overdrafts getting higher and higher, make it a priority to make some changes to your finances that will help in the long run.