How to Know if You Need an Overdraft Protection Plan
Count the number of checks you bounce., Add up the fees you are assessed., Assess your comfort with online banking.
Step-by-Step Guide
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Step 1: Count the number of checks you bounce.
Anyone might occasionally bounce a check.
However, if you do it several times in a year, then you would benefit from an overdraft protection plan.There might be many reasons you bounce checks.
For example, your pay schedule might be set up so you don’t get paid when the bulk of your bills are due.
Alternately, you might always be short on money because you are living beyond your means. -
Step 2: Add up the fees you are assessed.
When you overdraw your checking account, you might be assessed many different fees.
You should add them up and ask whether you can continue to pay these fees each year.
These fees make you go deeper into debt:
Overdraft fee.
This fee is charged each time you withdraw more money than you have in your checking account.
For example, you have $100 in your checking and you write a check for $150.
If the bank clears the check, it will charge an overdraft fee.
Non-sufficient funds fee.
This fee is like an overdraft fee.
However, the bank refuses to clear the check.
Returned check fee.
The merchant you wrote the check to might charge a fee also for any bounced checks. , The easiest way to find out your balance is to use online banking.
You can log into your account at any time and find out the current balance.
If you are comfortable checking your account regularly, then you might not need an overdraft protection plan.
However, if you don’t have a home computer or don’t like putting your financial information online, then you might want an overdraft protection plan. -
Step 3: Assess your comfort with online banking.
Detailed Guide
Anyone might occasionally bounce a check.
However, if you do it several times in a year, then you would benefit from an overdraft protection plan.There might be many reasons you bounce checks.
For example, your pay schedule might be set up so you don’t get paid when the bulk of your bills are due.
Alternately, you might always be short on money because you are living beyond your means.
When you overdraw your checking account, you might be assessed many different fees.
You should add them up and ask whether you can continue to pay these fees each year.
These fees make you go deeper into debt:
Overdraft fee.
This fee is charged each time you withdraw more money than you have in your checking account.
For example, you have $100 in your checking and you write a check for $150.
If the bank clears the check, it will charge an overdraft fee.
Non-sufficient funds fee.
This fee is like an overdraft fee.
However, the bank refuses to clear the check.
Returned check fee.
The merchant you wrote the check to might charge a fee also for any bounced checks. , The easiest way to find out your balance is to use online banking.
You can log into your account at any time and find out the current balance.
If you are comfortable checking your account regularly, then you might not need an overdraft protection plan.
However, if you don’t have a home computer or don’t like putting your financial information online, then you might want an overdraft protection plan.
About the Author
Larry Rogers
Enthusiastic about teaching lifestyle techniques through clear, step-by-step guides.
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