Knowing how to avoid overdraft fees can save you money in the long run. Many times, these fees can be avoided with a few simple tips and tricks.
Change your Loan Due Dates
When your due dates aren’t in line with your payday, it can be difficult to budget and pay bills. Changing your loan due dates to a day that works best for your payday schedule can play to your advantage: it’ll make sure you have money for those bills and move you into another billing cycle period, which can help you budget your bills more easily.
To change your loan due dates, go to your financial institution to ask what their requirements are (and whether moving your dates are possible). Here at Northwest Community Credit Union, we allow you to change your due date to a day up to 15 days before or after your current due date. Note that we can’t change the due date for your credit cards. We’ll need your signature to change your loan date, so come in to any branch or give us a call at (800) 452-9515 to see if we can change your loan due date.
Set up Alerts for Low Balances
Financial institutions commonly offer services that can help you keep track of your balances, no matter how chaotic life may get. Sign up for notifications any time your balance is low to help you avoid overspending (and overdrafting).
When you receive an alert, it gives you the opportunity to stay on top of your balances by transferring money into your account or skipping a purchase you might not need.
Set up Overdraft Protection
Northwest Community Credit Union offers options to help you manage overdrafts. One of these options is Overdraft Protection, which automatically transfers funds from your savings to your checking when it becomes overdrawn.
More specifically, at the end of the day, the system will transfer your exact negative balance to your checking. However, your savings account must have these funds available or you’ll still get charged an overdraft fee of $28. With overdraft protection, when funds are moved out of savings, it charges an overdraft fee of only $3. That saves you a whole $25 dollars. Worth it!
Not all financial institutions offer this exact overdraft protection plan. Some may still charge you a fee. Be sure to check with your bank to ensure that you understand their specific requirements.
Set up Your Card to be Declined if no Funds are Available
At many financial institutions, you have the option to set your debit card up to be declined during a purchase if the funds are not available. For example, if you are at the store and your purchase is $40.00, but you only have $32.00 in your account, then it will decline your purchase in order to avoid overdrawing your account.
Declining your purchase can be an effective way of avoiding overdraft fees. However, keep in mind that this will not always work with checks that you’ve written, payments that haven’t hit your account yet, or automatic payments; they still have the potential to be withdrawn from your account.
Build up your Savings
It’s so important to have a “cushion”. If your checking account is negative, having extra money in your savings account allows you to transfer money to your checking account if you’re getting a little low and know you’ll have to make some purchases. This also ensures that your Overdraft Protection will successfully pull your negative balance from savings and to put it into checking, which is a $3.00 fee (better than a $28.00 fee, right?).
Use Cash for your Spending Money
Avoid overdraft fees by only spending the money you have in your pocket. Using cash for your spending gives you a mental “limit” for your spending. You can then use your checking account for bills and automatic payments. This makes budgeting for your bills each month so much easier!
Check Your Accounts Often
One of the most effective ways to ensure you don’t get overdrawn is to simply pay attention to your accounts. You can check your balances regularly in different ways:
We recommend that you review your accounts through our online banking a few times a week. Not only to avoid fraudulent activity, but to review your recent transactions and balances to ensure that you have positive experiences with your banking.
Paying attention to your accounts gives you the opportunity to act fast. If you ever notice anything that leaves you feeling suspicious or if you made a mistake and accidently went overdrawn, it is highly recommended that you call your financial institution immediately.
If you have any questions or concerns regarding overdraft fees associated with your NWCU membership or if you would like to enroll in any of these services, visit your local branch or contact us at (800) 452-9515.