The last time you bounced a check; did you seriously consider closing your checking account? The pain of returned check fees, the monthly service fees, the negligible interest on interest bearing checking accounts, -and the fact that even when you swear the bank has made an error, they are usually right-, may have made you, like many rueful bank customers, feel that this time you should just close your account.
You may never have even opened an account because you heard other people complain. After all, today’s returned check fees are usually $36, even if you just charged a pack of gum. It definitely burns, and it’s easy to make a mistake. However, the convenience and credibility of having a checking account makes it worthwhile to get one and take precautions not to overdraw your account.
Some of the conveniences of having a checking account go beyond paper checks. A checking account allows you to pay bills by mail without the cost and inconvenience of getting a money order, but these days you can also pay most bills online for a monthly $5 charge. Another convenience is the debit card which comes with checking accounts today, which is used like a credit card, but without the temptation of high-interest personal debt.
So what about accidentally overdrawing your account and racking up returned check fees? There are several things you can do about this when you set up or review your account. One is to ask that your debit card be set to deny if you don’t have sufficient funds for the purchase you are trying to make. For example, say you want to buy a shirt, and you don’t realize that you have a low balance. Instead of accepting the purchase and generating a bounce charge, it will deny the sale. Another is to apply for “bounce protection;” usually a $500 credit limit to cover you if you go over. There is interest on this, but it is cheaper than bouncing a check.
One additional trick is to buy prepaid credit cards for other revolving charges which may catch you unawares. For example, say you have student loans and internet charges which are the same amount every month, but you continually forget the dates. On the day you receive your paycheck, transfer the amount, plus a few dollars, that you will need to pay those bills from your checking account to your prepaid Visa. Have the revolving charges go to that card, and forget about it. Everything can be done online, and most can be automated. Also, don’t forget that you will be building good credit- and credibility.
However, nothing substitutes for staying on top of it. Many people don’t think taking the time to keep the checkbook ledger up to date is worth the trouble, and think that by checking their balance occasionally they can remember how much they have, but if you consider that two minutes could save you $36 dollars, you may change your mind. So get and keep a checking account, but keep it responsibly.
Author Bio: Louis Patrick enjoys writing about the American banking industry.
Looking for a free business checking account? Check out my ever growing list of banks that offer such a service.
Image courtesy of Pixomar / FreeDigitalPhotos.net