| Do you know how to balance your checkbook? Do | | | | at ATMs worldwide (for a fee), and free if you stay |
| you have overdraft protection on your checking | | | | within your bank's network. These debit cards carry |
| account or a debit card? Many consumers fail to | | | | the VISA or MASTERCARD logo and can be used |
| properly manage their finances, and they do not | | | | like credit cards. Purchases made with your debit card |
| understand the consequences of a mismanaged | | | | are automatically deducted from your checking |
| checking account and the potential cost it can involve. | | | | account. Debit cards do not carry interest rates and |
| When you balance your checkbook it requires that | | | | do not have grace periods so it is imperative you have |
| you keep track of all transactions you have made | | | | money in your account at the time you make the |
| through your checking account, including direct deposits | | | | purchase. |
| and debit card purchases. Most ATMs will give you a | | | | Overdraft Protection |
| receipt with your withdrawal, but this balance may not | | | | Banks offer overdraft protection to prevent bounced |
| include outstanding checks that have not cleared your | | | | checks. Some banks will automatically enroll checking |
| account. Once you get home make sure you put all | | | | account customers into a program where the bank |
| transaction that you did into your checkbook. | | | | covers overdrafts for a fee. These fees usually |
| To keep an accurate balance of your checking | | | | exceed $30 per overdraft. |
| account, make sure you balance your checking | | | | Overdraft protection is a good way to protect |
| account every month and review it against your | | | | yourself from inadvertently writing a check that you did |
| monthly bank statement to make sure your numbers | | | | not have funds to cover. Below are the common |
| are correct. To reconcile your account you must | | | | ways that banks offer overdraft protection: |
| compare your bank statement to what you have | | | | - Checking linked to Savings: If your checking account |
| written in your check register. Check off each item in | | | | does not have the funds to cover a check or debit, |
| your checkbook that matches the corresponding | | | | money will be taken from your savings to cover the |
| amount on your bank statement. If there are any | | | | amount. Your bank will charge a fee for each |
| transactions on your bank statement that do not | | | | overdraft. |
| match or appear in your checkbook, you need to | | | | Credit Card: Banks will offer credit cards in case of an |
| determine if the bank statement amount is accurate or | | | | overdraft. Usually banks will transfer more than is |
| if the transaction is valid, and adjust or record in your | | | | needed to cover the overdraft (usually in $100 |
| checkbook accordingly. If the bank statement amount | | | | increments). You will then be charged for the |
| is not accurate or valid, you should notify your bank | | | | overdraft, and interest equivalent to a credit card |
| immediately of the discrepancy. When all transactions | | | | advance will be charged on the funds. |
| on your bank statement have been accounted for, | | | | - Line of Credit: If you have a line of credit established |
| you can reconcile the bank statement balance to your | | | | (usually tied to your home), the bank will transfer funds |
| checkbook balance. The steps to reconcile your | | | | from this account to cover any overdrafts made to |
| checking account can be downloaded by clicking the | | | | your account. Interest is then charged on the amount |
| following link: Balance Your Checkbook in 5 Easy | | | | of money transferred from the credit line. |
| Steps. | | | | Get out of debt with Debt Consolidation [ |
| Direct Deposit | | | | Overdraft protection is also a great way to guarantee |
| With direct deposit, your paycheck is transferred | | | | that your credit score will not be negatively affected. |
| electronically from your employer to your bank | | | | Ultimately the end result of this protection guarantees |
| account. Many banks offer free services or incentives | | | | that a bad check will never appear on a credit report |
| if you use direct deposit. | | | | and may ultimately enhance your credit score although |
| Debit Cards | | | | the costs to you may be high. |
| Many financial institutions offer debit cards that work | | | | |