How to Avoid Overdraft Charges

Debit cards and online banking have it easier to spend money and they’ve also made it easier to overdraft your bank account. Back in the days of cash and checks, you could easily figure out your bank account balance and how much you were able to spend. All you had to do was track your balance in your checkbook register. Add up the amount of checks you’d written and subtract it from your last known balance. Viola!

After you’ve swiped your check card several times throughout the day, paid some bills online, and withdrawn cash from the ATM, keeping up with your account balance is hard. Then, factor in way charges hit your account at different times and convenience becomes an ingredient in a recipe for disaster.

Many banks won’t stop you from using your check card when it could overdraft your account. In fact, some purposely process your transactions in a way that makes you overdraft. You can count on paying that fee for every item that posts to your negative balance. If you leave your account overdrawn for too long and you’ll start incurring daily fees for the negative balance.

Overdrafts weren’t always handled this way. A few years ago, banks would just reverse transaction and charge you a non-sufficient funds fee. After that, the merchant could present the transaction for payment a second time. If you still didn’t have the funds, you’d get hit with another non-sufficient funds fee. On top of all that, you’d have to pay the merchant directly for the transaction plus a returned check fee. You could end up paying $90 on a $10 transaction.

You can avoid overdraft fees by keeping up with your account balance and the purchases you make. Link your checking account to a savings account or line of credit that will fund any charges that exceed your balance. If you’ve already incurred some overdraft charges, talk to your bank’s customer service to find out if you can have them refunded.

Be on Guard for Holiday Credit Card Fraud

The holiday season is one of the heaviest credit card fraud seasons. Thieves prey on unsuspecting shoppers, lifting their credit card information, or even the cards themselves, when their owners least expect it. Credit card fraud can be difficult to detect and expensive to fight. Preventing fraud is the best approach to dealing with credit card fraud during the holidays.

Purse and Wallet Safety

Ladies, when you’re holiday shopping, wear a purse with short straps. One that sits directly under your arm is ideal to prevent purse snatching. If your purse hangs down near your waist or hips, it’s easier for someone to snatch it away from you or pickpocket you.
Guys, it’s unusual, but safer, to keep your wallet in your front pockets while you’re shopping. Keeping your wallet in your back pockets makes it easy for thieves to sneak your wallet away from you.

Keep Credit Cards to a Minimum

Shop with only one or two credit cards. The more credit cards you have, the harder it is to keep up with them and the easier it is for one or more of them to be stolen.

Use Credit Cards Over Debit and Check Cards

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I recommend doing your holiday shopping using a credit card rather than a debit card or check card. If someone makes purchases on your stolen check card, the money immediately comes out of your account. It could take a few days for the money to be credited back to your account. You can dispute fraudulent credit card charges with your card issuer without having to be personally liable for the charges. Just make sure you pay off the credit card balance when you’re done shopping.

Protect Your Credit Card

Keep an eye on your credit card in stores. Don’t take it out until you’re ready to have it swiped. With digital cameras and camera phones, sneaky thieves could photograph your credit card and use the information to make purchases online. Always double check to be sure you get your credit card back after using it.

Check Your Statements for Theft

Check your billing statement frequently, especially if you can check it online. That will give you an early clue if your credit card has been compromised.

Report Lost or Stolen Cards Immediately

Reporting your stolen credit card before the thief has a chance to use it lets you off the hook for any fraudulent charges made. If you wait, you could be liable for up to $50 of the purchases.