 | Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive. |
Banking & Finance
2013-01-02 15:53:37
How can I keep my checkbook in check ?
A-Ever bounce a check? If you’re like most Americans you probably answered yes. In fact, Americans bounce more than 125 million bad checks each year. With so many online transactions, recurring automated bill payments, growing use of debit cards, and so many trips to the ATM, keeping track of the balance in your checkbook can become a guessing game, one that becomes expensive if you’re not careful.
An overdraft means you don’t have money to cover a check or other transactions against your checking account, but your financial institution pays it anyway. A bounced or NSF (nonsufficient funds) fee occurs when your financial institution returns your check to whomever you wrote the check to without paying it. And when that happens, the store can charge you a retuned check fee.
A bounced check every now and then could be a fluke. But if it’s more than an occasional event, improve your record keeping by being diligent in recording written checks, debit card and ATM transactions, and other fees. But if there’s still a bit of bouncing going on, consider using these three tools.
1. Transfer from other accounts – This kind of protection kicks in when you prearrange to have funds from one account transfer to your checking account when you don’t have enough in your checking account to cover a transaction. The best thing about this service is it helps avoid NSF fees.
2. Line of credit – A line of credit generally covers amounts higher than those associated with the occasional bounced check. If you overdraw your checking account, the financial institution transfers a matching amount from the line of credit into your checking account. While this service generally means avoiding bounced check fees, keep in mind that interest rates on a line of credit can run as high as credit card rates.
3. Courtesy pay – In a courtesy program, your financial institution will pay your over drafted checks, up to a maximum amount. Generally, you must bring the balance in your checking account balance back into the black within 30 days or the account could be closed. Courtesy pay fees generally will be a lot less than the fees you would accumulate without it. The fees might be about the same as the financial institution’s charge for nonsufficient funds, but less than the total NSF fee plus the penalties that merchants impose for receiving a bad check.
These tools can help you stay on track, but the best way to stay on top of your finances and prevent being overdrawn in the first place is to be aware of what you’re spending every day. Focus on recording every transaction in a timely manner.
