Save on Bank Fees, Opt Out | After Debt – Debt-Free Living

You will save a lot of money on bank overdraft fees if you “opt out” and stop using your checking account as a line of credit. Using overdraft protection can cost you dearly. Charges of $25 to $35 per check can really add up, especially have several incidents per month.

Granted, overdraft fees are cheaper than bouncing checks and running around town trying to pick up the returned checks by paying the merchant’s bad check fee and the check. Worse yet is being sued for many times the amount of the check by the time triple damages, attorneys fees and court costs are factored in. A $5 insufficient funds check can turn into a $500 judgment against you.

This method of managing, or not managing, your checking account is a vicious circle. It reminds me of the variety show act where the performer spins plates on poles and runs from pole to pole to keep the plates spinning less they crash to the ground.

Banks must now ask you whether or not you want overdraft protection. Just say no. Take control of your money. Balance your checking account, know how much money you have in the account. If you like automatic payment of your bills, start a bill payer service through your bank where you push the payments to your creditors instead of authorizing your creditors to pull your money from your account.

I review bank statements of families in financial distress every day. Bank fees are rarely on the list of expenses, yet the fees often add up to tens or hundreds of dollars each month. Paying for several overdraft fees per month or more could easily pay for a bookkeeper to manage your checking account. The money could certainly be put to better use. If you truly cannot manage your account, and you can’t break the vicious circle of overdraft protection, consider closing your account.

To read more about the new banking regulations, see:

Image courtesy of Wikimedia Commons. Author MichaelMaggs Edit by Richard Bartz

No related posts.