Money & Finance
How to cut back your overdraft penalty fees
If you’re in a dispute with your bank, chances are it will be over overdraft charges.
It’s incredibly easy to miscalculate what you’ve spent or overestimate how much money is in your account.
Occasionally, the slow processing system of your bank can be to blame.
Going into your overdraft can result in hefty fees and penalties.
By the end of our guide you’ll know how to cut down on the overdraft fees you pay.
The easiest way to avoid overdraft charges is to stay out of it in the first place.
Of course, this is easier said than done.
However, there are several steps you can take to ensure you’re at least less likely to enter the red.
Keep checking your account
First, regularly monitor your account. Be vigilant about watching your in-goings and out-goings. It’s the surest way to keep your account balance positive.
The easiest way to ensure this is to get online banking. Mobile banking is even better.
The easier you can check your account balance, the better placed you’ll be for making sure you don’t accidently fall into your overdraft.
However, the bank you’re with is also important. Some banks have a notoriously slow processing system.
Turn on text alerts
Many accounts also have a text alert feature.
You can set up an alert from the bank to come to your mobile phone whenever you fall below a certain balance.
This is a handy way of ensuring you don’t fall into the red.
For instance, by setting up your alerts to receive a text whenever you fall below £100, you can be sure to stay cautious from there on, until more funds have been paid into your account.
Dispute overdraft charges
Sometimes you can fall into your overdraft by accident. If you do, don’t take the overdraft fees charged by your bank lying down.
Ask for penalty fees to be refunded. Write a polite letter or email to your bank detailing why you accidently slipped into your overdraft.
Tell your bank you are a loyal customer.
Make sure they know that it was a genuine mistake. If need be, tell them the fees will hurt you financially.
Banks are generally rather forgiving, and if you complain about overdraft fees, so long as you are not always in the red, you can reasonably expect your bank to refund you as a goodwill gesture.
Pick the right bank account
Of course, if you are regularly slipping into your overdraft, the best way to avoid paying overdraft charges is to have an account that allows for an overdraft.
If you know you will be dipping into minus numbers on at least a semi-regular basis, get an account that caters for it.
Some accounts come with a fee-free arranged overdraft, others with a buffer.
Different types will be suitable to different people, so pick what suits your needs best. Be sure to shop around for the options most suitable for you.