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Jun212012

How to avoid NSF fees

I bought this pack of gum today. Wrigley 5 - Cobalt. Probably my favorite flavor of gum...but that is beside the point.

I bought this pack of gum for $1.39, and in my opinion, it was $1.39 well-spent. The shocking thing is some people are paying up to $30 for this exact same pack of gum.

How can this be, you ask? Overdraft fees.

Imagine this scenario: You stop into the gas station for a pack of gum-$1 and some change...$2 at most-and mindlessly hand the cashier your debit card, he or she swipes it, and you leave with your pack of gum. Little did you know you just paid $30 for a single pack of gum-because you didn't have enough money in your checking account to cover it.

Overdraft fees are extremely frustrating and you can end up paying hundreds-even thousands-of dollars a year to your financial institution by not carefully managing your money.

Here are 3 tips on how to avoid overdraft fees and how to stay on top of your account activity!

  1. If you have a checking account at Star Choice Credit Union, we offer a completely free service through our online banking that allows you to sign up for e-mail and/or text alerts. There are many different options to choose from including when and what time to notify you. For example, you can choose to be notified when your checking account goes below $50, but don't send text alerts from 10pm-6 am, because that is when you are catching up on your much needed sleep! It's pretty cool and very convenient, you can find out how to get set up here!
  2. Keep a record in your checkbook register! Many people make the mistake of relying on their "available balance" which doesn't necessarily include all of your pending transactions. If you make a record of every purchase, you won't have to worry about whether or not your available balance is including all of your recent transactions or checks you may have written.
  3. Look into overdraft protection. I'm not saying sign up for it, nor am I saying opt-out of it. Each person is different-you will ultimately be the one to decide if this is a good fit for you or not. For some people, overdraft protection is great and can save them the embarassment of a declined card or a bounced check every once in a while, but for others it just gives them the go-ahead to spend more money than they have. One thing to consider is that with overdraft protection, you are still paying about the same amount for the service as you would an overdraft fee, it just means that your financial institution will cover the transaction, so your card will not get declined and your checks will still clear, regardless of the amount in your checking account.

If you have trouble staying on top of your account activity and find yourself giving the majority of your paychecks to your financial institution in fees, take these tips to heart and start spending your hard-earned money on something worthwhile!

 

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    Wow you have discussed a very good issue but why are people pay such amount of money for this pack of gum. After reading this article I have got answers to my many questions and tips to avoid overdraft fee are fantastic.
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Reader Comments (3)

This is one of the most informative and outstandingly well structured post Before I bank with private banks, I wasn't aware of overdraft fee or such. There were no one who could tell me what that is, how it occurs and so forth. I wish I were with SCCU or any other credit unions beforehand so that I could have known this better and also credit unions have so much customer care with due respect that is the first thing that I like. Love you Star choice Credit union and all the credit unions.

July 6, 2012 | Unregistered Commenterdipesh

This is such a helping information. I used to have lot of overdraft before but right now its 0. Yes, its been a long time I have been managing my account really well. What I do? I usually check my balance everyday and make sure when I buy something I use the right card either debit or credit. If I have money available, I use a debit card if not then credit card and pay it before the billing cycle ends. Actually, that is worth better than spending 30 bucks for an overdraft.

September 16, 2013 | Unregistered CommenterDipesh Shrestha

That is great Dipesh! We are glad you are NSF-free! :)

September 16, 2013 | Registered CommenterStarChoiceCreditUnion

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