You know you don’t have to think about credit card and bank overdraft fees as if they were an unavoidable force of nature. Oh I know that they can sometimes shake you like an earthquake or push you around like a tornado. But in the end, overdraft fees are totally man-made and can be avoided. Here’s how.
First, you must wrap your head around the idea that you have to control your spending. Use your credit cards sparingly. Just use them for some special items, or use them only for emergencies, or better still swap them out for prepaid debit cards and really control your spending. Try to put yourself on a cash system – no more credit.
Once you’ve put those credit cards on the back burner, you can inch away from your credit card limit and you’ll pretty much have your credit card overdrafts taken care of. But you still have to deal with those pesky banking overdraft fees. They’re a lot sneakier.
Bank overdraft fees can happen for all sorts of reasons. Those reasons of course are shrouded in the legal language you’ll find plastered all over your monthly statement (usually the back). That’s what makes them harder to avoid because you truly don’t see them coming.
For instance banks have long had a practice of processing your debits before they process your credits so the charges you make on payday after your check has technically arrived, are accounted for before the paycheck itself. That means you can pop over the line and be in overdraft status temporarily and still get dinged.
To combat this type of thing you just have to apply brute force. You must be vigilant and try to never creep too close to the bottom of your balance. Because if you do, you can be sure that the bank will find a way to send you the rest of the way.
So avoiding overdraft fees is very possible but you have to work at it sometimes like a part-time job. Treat each bank statement seriously and even get into the habit of looking up your balance online once a day. The more prepared you are and the more you watch out for yourself, the less likely you are to ever have an overdraft fee again.
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