It’s hard to live without a checking account. But it’s also hard to live with the fees you can rack up if you overdraw it, and banks are only too happy to help you do it. For example, many clear checks by size rather than sequence.
Quoted With Edits From: Overdraft Traps and How to Avoid Them (WYMT Mountain News)
Does Plastic Equal Convenience?
You may have seen the Visa commercials that portray consumers who are paying for consumer goods with cash as, behind the times, uncool or a wrench in a well oil machine. This is of course Visa’s attempt to persuade viewers to use their payment methods however, we can all attest to the fact that plastic is a far more convenient payment solution than cash. Just like payday loans are far more convenient than getting a loan through the bank.
With the media and technology industry relentlessly promoting a cashless society it is hard to live without a checking account and debit card today. Unfortunately, this subjects us to a slew of other inconveniences as well.
Fees, What Fee’s?
Namely, it’s the fees that we have to pay just to have the privilege of using a checking account.
ATM's Can Cost You!
These range from things like, monthly service charges, overdraft fees, check fees, ATM fees, minimum balance fees, and a host of others that seems to nickel and dime our financial well being.
The most dreaded of all banking fees is the overdraft charge. Unfortunately it’s not in the banks best interest to help you avoid these fees so a small misstep can find you falling down a slippery and costly slope that could require you to take out payday loans.
Overdraft fees are the outcome of over drafting your account, or in other words spending money that you don’t have. These fee’s cost on average about $28 to $35 per overdraft but some banks have a tiered structure which increases the amount of each successive overdraft charge that hits the bank.
Your Next ATM Cash Advance May Give You More Trouble Than Cash.
Many make the mistake of overdrawing their account when pulling cash out of ATM machines. Because folks are more likely to carry there ATM cards with them rather than their checkbooks, they are often left guessing what they have left in their checking accounts when making withdrawals. The downside to this is that the withdrawals made at ATM’s are immediate deducted and the bank does not prevent you from overdrawing your account therefore, accidentally requesting more money from the machine then you have funds in your account to cover, will result in an overdraft charge.
The banks calls these overdraft transactions “courtesy overdrafts”, which are really no more than a loan which you did not ask for but are held to the terms and conditions thereof. These loans may be as small as a penny but will require a payment of $30 to be made within a week’s period of time before additional fees and charges are accrued.
What Can You Do?
The solution to this problem although simple, is quite difficult for many. It requires a more persistent and careful eye on your finances. Taking a few minutes each evening to record your day’s transactions and balance your checkbook will likely save you a lot of trouble sooner or later. If this proves to be to difficult, it would be wiser to make all your transactions on a credit card which you could then payoff at the end of the month. This would prevent overdrafts but may encourage unhealthy spending habits. If you have found yourself with too many costly overdraft fees, you can apply for payday loans to get your checking account back on track.
Discussion of Overdraft Traps and How to Avoid Them with Tips and Payday Loans