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Alternative to Overdraft Protection

Money Tip: Alternative to Overdraft Protection

Online banking makes tracking expenses much easier than the days of checkbook registries, but it doesn't ensure you're safe from overdrawing your account. Spending money we don't have always comes with a price, whether in the form of credit card interest of overdraft protection fees from your bank.

If an outstanding check slips your mind and it bounces because you spent money that you didn't really have, overdraft protection can cost about $20-$30 each time you use it. Instead of opting for this type of protection, ask your bank to link your checking account to your savings account in order to save on fees. The cost of transferring funds from one account to the other is typically a fraction of a standard overdraft fee.

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Indigo4320 Indigo4320 7 years
Sometimes life gets away from us pinkzvm. I try to keep it balanced but with my schedule it's hard to stay organized. Overdraft protection has saved my booty before for sure. I think I will try the savings transfer to cover and overages! I think it's less than $10.
codewhiz codewhiz 8 years
I don't see how people can overdraft if you simply record all your transactions in your check register.
oliveoyle625 oliveoyle625 8 years
I did do that with wamu, but I think they still charge me a fee if I were to overdraft.
dcfashionista dcfashionista 8 years
When my credit union take the difference from my savings account there's no charge at all.
Lynne Lynne 8 years
I agree 100%, darkangel! :) I'd rather get one fee than multiple high ones. I think I'm charged $9 or $12. I just wanted people to be aware that some banks might still charge a fee even if the checking/savings are linked. This has only happened to me once in the past 2 years, however. And I still use the register journal and balance my checkbooks monthly :FOGEY:
darkangel2305 darkangel2305 8 years
Lynne usually the charge is less severe though. $10 a day, versus $35 per transaction. I have gotten $35 a transaction each for stuff like $2 coffee and $5 lunch because they post the high item first (meaning I got negative for a $100 check by a couple of bucks, but then all this lil stuff came in and I got a fee per transaction)... I would rather pay $10... At least that's how my banks have usually worked.
Lynne Lynne 8 years
...unless the overdraft protection only works when you have a savings account in which to pull the money from AND get charged. That's how one of my banks works their overdraft protection.
dcfashionista dcfashionista 8 years
I do that and it saves me time and money. I am always forgetting checks. I cannot balance my checkbook to save my soul.
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