Have you ever woken up to an overdraft checking account? It’s anything but fun! An overdraft checking account can ruin your day. Sometimes we know what the cause is, but many times this comes as a complete surprise. Check out our tips below for how to manage if you wake up to that dreaded overdraft in your account.
What to Do When You Overdraft Your Checking Account
A checking account overdraft can definitely put you into a tailspin. That dreaded feeling in the pit of your stomach can be a shocker first thing in the morning when you get the phone call, email, or text message telling you that you have an overdraft charge. No matter what the cause, the tips below can help you manage the process of fixing this and prepare for the future.
Figure out what caused the overdraft.
One of the best things you can do when you overdraft is find out what caused it. If could have been a mistake, so always check to see what actually caused it. This will help you get everything resolved faster.
I recommend checking your accounting of payments to what is showing on your account. With accounts online easy to access, this is easier than ever! You don't have to wait for the bank statement at the end of the month to balance your books. Just log in, print off the last 30 days of charges and go over things carefully with your check register or accounting spreadsheet.
If the overdraft is not an error in accounting on your part, but a charge that isn't supposed to go through yet or a deposit that hasn't hit on time, you'll be able to know a few phone calls are a must. If it is your own error in accounting, you can easily figure out how much is needed to get your account in good standing and begin the process of coming up with funds to deposit.
Call your bank.
An overdraft can actually be annoying because of the fees more than anything. Calling your bank can help eliminate some of those fees. If this is your first time, they may even take off the fees completely! This can also help you know what is pending to post to your account as well as deposit cut off times.
Remember to ask them at this time, if there are holds on deposits and how much for what time period. Sometimes check deposits are held up to one week, so you may need to have cash only to prevent any other overdraft charges happening until the deposit hits your bank.
Transfer money ASAP.
In order to avoid getting any more overdraft fees in your checking account, you need to transfer money ASAP. This will help you get everything balanced in your checking account. Keep in mind that if you’re in the negative, the fee will also need to be covered to help you get back in positive standing. This is why you want to call the bank ASAP. Getting those overdraft fees canceled can be super helpful!
Rethink overdraft protection.
If you have never had overdraft protection, it may be a good idea. It’s always nice to know that even if a financial accident occurs, you’ll be taken care of. There is nothing worse than being surprised by something financially. Overdraft protection is usually a small fee but can save you a ton of money in the long run.
You can also typically allow money to be automatically pulled from a connected savings account to help cover overdrafts. This is usually a zero fee option and can be ideal if you are planning on avoiding extra banking fees down the road.
Keep a money buffer in your account.
Something wise to do, when it comes to your bank account is to keep a money buffer in your account. An extra $50-$100 in your checking account at all times can help protect your account. People make mistakes all the time and this small financial padding could help protect you in the long run.
After you have dealt with an overdraft in your checking account, there are some things you can do to protect yourself in the future.
- Know what you’re spending and what balance is in your checking account.
- Check your checking account often to see the balance. Thanks to online checking and the availability of apps, this usually isn’t a big deal.
- Use cash as much as possible! When you have cash, it’s much easier to only spend what you have on hand.
These tips are perfect for helping you manage when you have an unexpected overdraft in your account!