How to Avoid Overdraft Fees
We all have banes of our existence. For dogs, it’s often the postman. For writers, it can be a lack of inspiration. For Batman, it’s, well... Bane. When it comes to employees facing financial hardships, however, overdraft fees can be a tremendous bane.
In fact, overdraft fees paid by consumers to banks totaled $34 billion last year—a shocking level that hasn’t been reached since The Great Recession. So it’s not an uncommon issue. But what can we do about it? If you’re struggling with overdraft fees, here are a few practical ways to avoid them:
- Sign up for overdraft protection.
Many financial institutions automatically enroll consumers in overdraft protection, but not all. If you’re not protected by overdraft protection, you can expect large, unwelcome fees if you have insufficient funds for a transaction. (For example, a well-known national bank will charge you $35 per overdraft and can charge you three of these fees per day!) Sign up for it, if you can.
- Know how much you should keep in your checking account.
Of course, you’ll never experience overdraft fees if you have enough money in your account. Some people struggle to have enough money in the first place, but others simply aren’t aware of the buffer amount they’ll need to avoid overdraft fees. Know how much money you’ll need and talk to a financial advisor (or a representative from your bank) if you don’t.
- Take another look at your budget.
If you’re getting hit with a lot of overdraft fees, it might also be time to reevaluate your budget. Are you paying down more debt than you need without giving yourself the ability to cover short-term bills? Take another look at your net income and crunch the numbers to see if there’s a smarter way to allocate your money.
- See if your employer offers (or is open to offering) a payroll card.
Finally, a payroll card might be the best option for avoiding overdraft fees. With Spentra’s Visa® Payroll Card, for example, you can access up to 50% of your earned wages before payday rolls around. That means you can pay off certain bills or charges before they hit your checking account.
If your company has a payroll card, take advantage of it. If your company doesn’t offer a payroll card (or it’s not ideal for your situation), tell them about Spentra. There is no cost to employers and Money Earned is only a small transaction fee for employees and tremendous benefits for both parties involved.
Want Spentra at your place of business? Contact us today to learn more about how to get started.