If you have ever bounced a check, you know all too well the pain of the overdraft fee. Overdraft fees can add up fast—but they can be avoided. This page will show you how to avoid overdraft fees and how to take complete control over your finances.

• 1. Keep up with the money is in your account.
• 2. Consider overdraft protection.
• 3. Link checking account with other accounts.

The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.

(Creative Commons photo by Tracy O)

• To avoid overdraft fees you need to know exactly how much money you have in your bank account. It is all too easy to swipe your debit card over and over during the day, and forget how much you are spending.

• Access your account online frequently to check your balance, and don't be fooled by the words "available balance." This is not always an accurate reflection of what you have in your account—there may be several bills you recently paid that haven't posted yet.

1. Save your receipts and note each time you:
   1. Use your debit card
   2. Withdraw money from an ATM
   3. Write a check
   4. Make an automatic bill payment

• During a recent shopping extravaganza, you decided at the last minute that you just couldn't live without that pricey pair of shoes. You whipped out that debit card, paid for your new stilettos and walked out of the store beaming. Then you remembered that you'd just paid bills. A lot of bills. The transaction for the shoes was approved, so you must have had enough money in your checking account for the shoes, right? Maybe not. Many banks will automatically pay for the transaction even if you don't have enough money in your account to make a purchase, but this can come at a very steep price—in the form of overdraft fees.

• Overdraft fees can add up quickly. Each time you make a purchase that exceeds the amount of money in your account, you could be hit with fees of anywhere from $25 to more than $40, depending on your bank's overdraft policy. You can avoid this pricey penalty by carefully managing your account.

• Many financial institutions offer overdraft protection for customers. They will cover any transactions you make—for a price. In some cases, you may not even realize you are overdrawn. You may receive a letter from the bank alerting you to the overdraft and the subsequent fees, or you may check your account online and see a dreaded negative balance.

• Why would the bank allow you to spend more than you have? Overdraft fees are big money makers for banks and credit unions. According to the Center for Responsible Lending, these financial institutions collect nearly $18 billion in overdraft fees annually.

• Find out if you can opt out of overdraft protection with your bank or credit union. This way, if you try to make a purchase that exceeds the amount of money you have in your account, the transaction will be denied.

• There are several other things you can do to avoid overdraft fees.

1. Consider linking your checking account to a savings account, to cover any potential money shortfalls
   1. Be sure to ask about transfer fees in the event of an overdraft
2. Link your checking account to a credit card
3. If you feel you have been charged an overdraft fee in error, contact the bank or credit union immediately; they may waive all or part of the fee

• Introduction
• Step 1: Track Your Spending
• Step 2: Overdraft Protection
• Step 3: Other Ideas