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Let’s face it, overdraft fees are embarrassing. I think we could all agree on that.
A few months ago, I had a little run-in with not one but two overdraft fees that hit my account at the same time. $70 worth of fees were being taken out of my available balance, and I was devastated. I was so confident that I had everything under control, so I nearly lost my breakfast when I checked my account that morning.
Frantic, I began looking through my transactions to see just where my calculations went wrong.
$20 ATM withdrawal.
$13 beauty supply purchase (don’t judge).
$11 for gas.
All three purchases were pending to post at the same time, although made on separate days. Luckily, after making a phone call I was able to get my $70 back. Shew!
Get Your Overdraft Fees Back
Develop a good relationship with your bank.
Throughout my college years, I worked as a bank teller and got to witness firsthand just how important a good banking relationship is. When you establish a good relationship with the people of your financial institution, they are more willing to work with you during your time of need. I’ve been with the same bank for about five years now, and have gotten to know the employees pretty well. When I spotted my overdraft charges I immediately contacted the branch location I was most comfortable with, and plead my case to the manager.
Squeeze in some time to physically stop by your bank every once in a while so the employees are able to put a face to your name. When an issue arises, please be polite. If you come storming into the bank making demands you’re more likely to get the “I’m sorry but…” response. Do not threaten to close your accounts, although it may be tempting when your emotions are running high, or else you lessen the likelihood of getting any assistance. As a teller, I’ve seen this play out numerous times and it rarely went in the customer’s favor.
Did the manager care about their threats? No.
Did they really close their accounts? No. Were their fees refunded? Of course not.
Were their fees refunded? Of course not.
Calmly own up to the fact that you made a mistake, and make them believe that your mistake will not be one that is reoccurring. After all, your account is down in the dumps so if you close your account it isn’t like your bank is going to mourn the loss of your non-existent funds.
Keep all accounts in good standing.
When your account is in good standing banks are more willing to refund fees because you’ve proven yourself to be a valuable customer.
Think about it. If you are always in the negative then what would motivate them to work with you?
As a teller, I would look over an account’s history to determine if overdraft fees should be refunded. If you have always kept your account with a positive balance, then you are more likely to get back your funds. Trust me, banks want to keep your business if you are a good customer so don’t be afraid to ask for your money back.
Stay out of the Negative
Set aside funds for a rainy day.
Setting money aside for the unknown, such as an emergency fund, gives you much-needed cushion during those uh-oh moments. If you’re anything like me, simply remembering to save just isn’t going to happen. Luckily, you can automate your savings which means that the funds are automatically deducted from the account of your choice.
Recently, I’ve been using a company called Digit to help me put back money that may just be lying around waiting for me to blow through it. Digit is designed for those with bad spending habits and seeks to help you avoid unnecessary financial hardships. To get set up, simply connect your checking account and Digit will analyze your income and spending. That’s it! For just $2.99 a month, they find money that they can set aside for you into an ‘online savings account’. Don’t worry, you can get to your money at any time and unlike most banks withdrawals are unlimited. Because of their no-overdraft guarantee, they will never transfer more than what you can afford.
If possible, try to use cash to pay for your purchases instead of your debit card. This way, you know exactly how much you have left to spend because you can physically see your money. When using a debit card it is easy to lose track of your remaining balance and thus the chances of overdrawing increase.
Remember that your balance may not reflect all of your transactions.
This is what trips up a lot of people, including me.
Let’s say you have $30 in your account so you swipe your card at the gas pump for $15 on a Saturday. When you check your account the next day, your balance still reflects the original $30. Great right? Not exactly.
You know that feeling when you check your account and you have more money than you expected? You’re on top of the world but there’s that nagging feeling that you’ve forgotten something? Well, after being over the moon you make a $20 purchase, not remembering that the previous $15 you spent on gas has not yet cleared. Come Monday, the $15 gas purchase posts to your account leaving you $5 in the negative. Oh yeah, don’t forget to top it off with that lovely overdraft charge.
Track your spending.
I know, I know, this should be a no-brainer right? Well, common sense isn’t always common…I should know.
Tracking your spending is vital for keeping a positive balance. You may think signing up for online banking is good enough, but solely relying on it for the most accurate balance can cost you big time. If you are a pen and paper type of person, then consider using a checkbook register if you don’t mind doing a little math. If you are more tech-savvy, there are numerous spending apps that will do the math for you.
Lately, I’ve been using an Personal Capital and I cannot recommend this company enough! With their tools, you can manage all of your finances in ONE place even if you have accounts at different financial institutions. All you have to do is link all of your accounts (credit cards, 401K, bank accounts, loans) and all of your transactions and spending habits are there to view. You can sign up completely free of charge.
It can be pretty discouraging when your account goes into the negative, and the extra fees applied by the banks are like salt on an open wound—they sting. Luckily, there are ways to get back your fees and ensure that you don’t make the same mistakes twice.