Dunnan on Dollars Personal Finance Tips from Nancy Dunnan It Pays To Be Balanced
July 10, 2009 - When riding a bike, roller skating or when reviewing your bank account. But the latter is getting more difficult to accomplish. That's because, according to an FDIC survey, most banks automatically enroll customers in an overdraft program. And with some, there's no opting out.
The four primary ways your can overdraw your account are: if you write a check, withdraw money from an ATM, use your debit card or make an automatic bill payment for more than the amount in your account.
If your bank pays the amount you will be charged a courtesy overdraft fee. If your bank returns your check without paying it, you'll be charged a bounced check fee. And, on top of that, the person or company you wrote the check to (the telephone company, your landlord, the electric utility firm) may charge you a returned check fee!
A study just published by "USA Today" reports that each of the nation's 10 largest banks "allows consumers to overdraw with checks, debit cards or at ATMs." The study also notes that many banks process large dollar transactions first, thus actually triggering even more overdraft fees.
The overdraft fees range from $19 at U.S. Bancorp to $39 at Citizens Financial with the typical fee being $35. These fees are per item!
And the number of overdrafts allowed may surprise you. Bank of America, for example allows consumers to overdraw 10 times in one day!
Protecting Your Money
You don't need to become a victim of this scenario. Here are 7 moves to protect yourself from onerous fees. - First, get a copy of your bank's fee schedule. Find out if a fee is imposed every time you use a debit card, go to an ATM, etc.
- Balance your checkbook the old fashioned way. And forget the "available balance" amount given at the ATM, online or by phone. A number of banks include the amount you can borrow in the "available balance" figure.
- Keep a record. Of your ATM withdrawals and fees, your debit card purchases and all online electronic payments.
- Set up a transfer plan. If you truly have trouble tracking your money, sign up for an automatic transfer from the savings account you have with the bank. Then, if you overdraw your checking account, the bank can transfer funds from savings into checking. Know what the transfer fees are before signing on.
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5. Use only ATMs that are in your bank's system. Going out of system generally means getting hit with a fee. Instead, withdraw a lump sum of cash once a month or once a week at your bank's ATM.
6. Speak up. Call up. If you find a mistaken charge on your statement, your bank may waive the fee - especially if this is the first time and/or if you have a large amount of money (or a mortgage) with the institution.
7. Use an online (or smaller) bank. They often charge lower fees than the big nationals. Some have no fees at all.
For Further Information: www.fdic.gov.
- Nancy Dunnan
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If you want to suggest a column topic for Nancy, drop her a line.
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