Like all debts, overdrafts need to be managed to ensure that you’re not paying more than you need to. Left unchecked, banks can charge high fees for overdrafts which can leave you in an unfortunate financial position. If you’re paying too much in overdraft charges each month, there are a number of ways you can cut back on these costs.
Keep an eye on your account balance at all times – especially at the end of the month
Most payments and bills are taken towards the end of the month, which is when your account is most at risk for going into its overdraft and attracting charges. It’s always worth keeping a close eye on your account balances during this period, as certain bills can be charged “on or around” the specified date.
If you feel that your bank is charging you too much for overdrafts you can always switch to another bank! If you do your research on a comparison site you can switch to an account that has either lower fees or waives the fees for a certain period, saving you money in the long run.
Claim unfair charges back
If you feel that your bank has been excessive in charging you fees, you can try to reclaim them or come to an arrangement with your bank. It doesn’t cost anything, so it’s always worth a try. MoneySavingExpert have compiled a step-by-step guide on how to claim these charges back.
Manage your finances better
Better financial management is key to avoiding unexpected charges and fees. It always helps to have a savings buffer to ensure that any emergency expenses or bills don’t immediately push you into your overdraft. We have compiled a list of useful articles on how to best achieve this:
- The right way to manage your finances
- How to manage your debts
- How millennials save money
- 5 ways you’re probably wasting money
Remove your overdraft facility
If dipping into your overdraft leaves you concerned, you can always remove it! You can speak to your bank to request this, or otherwise change your account to one that doesn’t have an overdraft.
Set up account alerts
Most of the major banks allow you to set up text or email alerts when you go into your overdraft or reach a certain balance, allowing you to react much quicker and plan accordingly.
Transfer your savings
It’s always a good idea to have a savings account, as it can act as a financial buffer for unexpected expenses. If you’re about to go into your overdraft and attract fees, it might be worth temporarily transferring enough to maintain a positive account balance, and then transferring it back at a later date.
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