The vast majority of us can relate. One month, you overspend on a few things, and the next thing you know, you have a negative balance in your bank account.
You may fix your overdrawn bank account and avoid it happening again by following these instructions. You need to take swift action since further overdrafts, bounced checks, and fines might accrue if this issue is not resolved immediately.
Know The Overdraft Fees at Your Bank
You'll likely incur a cost whenever your bank account goes into an overdraft, and some even add daily overdraft fees. You may also be responsible for returned check costs if your check has bounced. Contact your banking institution to learn more about the fees you will be charged and the rules they have in place. If your account has a negative balance and accrues any costs, you must pay them in full.
Quit The Account
Stop any discretionary spending until you can get your account back into the black. There are a lot of costs associated with checking accounts, so it's best to avoid using them until you've dealt with the underlying issues.
The same goes for any subscriptions or payments automatically deducted from your account, as each one might result in further charges. If you incur overdraft or fee charges, your bank or credit union will often apply funds from your subsequent deposits to pay off the overdraft or fee amount.
Create A New Balance
You should next proceed to balance your bank account manually. To quickly put your account in the positive, you may use this to calculate how much money you'll need. Remember to include any costs associated with a returned check or overdraft and any charges or statements that have yet to be processed.
There are a few approaches to striking a financial balance. You may check your account balance, recent transactions, pending payments, and more whenever possible by logging in and browsing the available options. 4 If you have been keeping track of your spending, you may consult your checkbook or account ledger.5
Bring Your Account Balance Up ASAP
It would help if you restored a positive balance to your account as quickly as possible. If it remains overdrawn for more than a few days, your bank may assess additional, accumulating "extended overdraft costs."
Banks often cancel accounts that have been stretched for a long time, albeit their policies differ. 7 Use a portion of each paycheck's cash flow to cover the gap if you make cash purchases. You might also try selling some unnecessary stuff to fill in the shortfall.
Get In Touch With A Bank Employee
Suppose you phone your bank's customer care line after incurring an overdraft or returned check charge. In that case, the bank may be willing to waive the fee the first time it occurs, especially if it is the first such price incurred by a new account or the first such fee incurred by any statement in a new calendar year.
8 As a result, you may be able to lower your total debt. Keep in mind that banks are not bound to refund any fees; nevertheless, you will usually have more excellent luck if you are courteous and ask gently. If you have overdrawn your account and cannot pay it back immediately, you should contact your bank to work out a repayment plan to prevent your overdue payments from being notified to ChexSystems. 9
Do What You Can to Prevent Future Overdrafts
You can keep using the same account once you've paid off any outstanding balances, but you should take the following precautions to avoid overdrawing it in the future:
Monitor Your Expenditures
Always double-check your ledger before making any more purchases. The convenience of mobile banking makes daily account checks for pending and cleared transactions a breeze. Keeping records might help you avoid losing money due to missed fees or bank errors.
Keep in mind that not all of your checks or debit card transactions may have cleared yet, so don't assume the balance displayed at the ATM or online is accurate. 4 Keeping track of your account balance is crucial.
The Low Balance Alert Signup Page
Most financial institutions provide low-balance notifications when your account falls below a specific threshold. Although you probably won't need this if you're keeping tabs on your spending, it's nice to have it just in case.
It Would Help If You Did Not Choose Overdraft
With few exclusions, you must sign up for the bank's overdraft service to overdraw your bank account. After an overdraft is a perfect moment to exercise this right of refusal, though you can do so at any time. However, this implies that your transactions will be refused if your account balance exceeds the minimum required amount.
