How to Avoid Being Charged Overdraft Fees

Overdraft fees can be a frustrating and expensive aspect of banking. They occur when you spend more money than you have available in your checking account, and the bank covers the difference for you. However, this service comes at a cost, usually in the form of a high overdraft fee.

Here are some tips on how to avoid being charged overdraft fees:

1. Keep track of your account balance: The easiest way to avoid overdraft fees is to keep track of your account balance. You can use a spreadsheet, mobile app or even a pen and paper to track your income and expenses. This will help you know exactly how much money you have available to spend.

2. Set up account alerts: Many banks offer account alerts that can notify you when your balance falls below a certain amount. You can set up these alerts via text, email or push notification. This can help you avoid overdraft fees by letting you know when your balance is getting low.

3. Opt-out of overdraft protection: Some banks offer overdraft protection, which means they will cover your transactions even if you don't have enough money in your account. However, this service comes with a fee. You can opt-out of overdraft protection and avoid these fees by contacting your bank.

4. Link your accounts: Some banks offer the option to link your checking account to a savings account or credit card. If you overdraw your checking account, the bank will automatically transfer funds from the linked account to cover the difference. While there may be a small transfer fee, it is often less than the overdraft fee.

5. Keep a buffer in your account: To avoid accidentally overdrawing your account, it's a good idea to keep a buffer of funds in your account. This can be a few hundred dollars or whatever amount you feel comfortable with. By doing this, you'll have a cushion to cover unexpected expenses or small errors in your calculations.

In conclusion, overdraft fees can be avoided by keeping track of your account balance, setting up account alerts, opting out of overdraft protection, linking your accounts, and keeping a buffer in your account. By following these tips, you can save yourself the frustration and expense of overdraft fees.