Bouncing checks? You are not alone. Now you know you need to be careful when paying with a checking account. However, ignoring your overdrawn checking account will only lead to further problems. One one-time bank fee left unpaid can swell into a charge you can no longer afford. You do not want to left this gone without addressing because it will only get worse. Your overdrawn checking account morphs into a closed checking account then an 800 credit score or even a 720 credit score become sub-prime credit. That is not what you want because it will be more difficult to get credit and you will receive a higher interest rate on the money you borrow.
Tips to avoid an overdrawn checking account:
- Enter every transaction into your checkbook register, even direct debits. Be detailed with dates, checks, debit card purchases, deposits, automatic or preauthorized withdrawals or deposits and ATM withdrawals. Keep a running total of the balance of available funds–if you lose track call your bank’s 800# to find out your standing.
- Make sure there is always at least a couple hundred dollars for an account buffer. Your checking account gets low: you are still ok.
- Protect your account by signing up for overdraft protection either from a savings account.
- ATMs are not a cash machine in the sense of making money, though many treat them that way. Don’t withdraw money you do not have!