Protecting yourself from Overdraft and Bounced Check Fees

If you are not protecting yourself from overdraft, or bounced-check fees, you are one foolish individual. Not only is it expensive, you are also establishing a record that will stay with you for a very long time. Some of us make occasional errors in addition, others simply forget to write down every single check written. Whatever the reason, several options are available to you for your own protection.

Many banks now offer overdraft protection accounts within which you may have limits up to $500. They do not usually charge for this service, but you still must keep track of your affairs, or you can still run into problems. Knowing that an overdraft will not occur can be tempting, particularly when things get tough, so beware of your own weaknesses.

Some years ago, I converted all of my spending to a cash basis. I make every payment by cash, including my telephone bill even though I pay a one dollar fee for paying the bill at my grocery store. I know beyond a shadow of doubt that I cannot spend what I don’t have, thereby never exceed my budget. I use my no-fee bank account only for check cashing purposes, and to receive a monthly direct deposit from the government.

For those reluctant to handle cash as I do, a pre-purchase debit card accomplishes the same thing. They can be purchased in fixed amounts, and re-filled when the fixed amount has been exhausted. My bank debit card stays at home, and basically untouched. I do use one credit card for occasional treats, or unexpected expenses.

Each of us has circumstances unique to our individual life styles, and no one method is appropriate for everyone. What I do works well for me, and might be an option for you if you have occasional problems with a “forgotten” check that bounced and hit you right between the eyes!