Another great way to avoid pesky overdraft fees is to link your checking account with your savings account, or even with a credit card, in order to avoid overdrafting your checking account. Most banks allow you to link your checking account to your savings account in case you overdraft on your checking account, and need to quickly transfer money from your savings in order to complete a purchase.
To link your savings account to your checking account, both accounts typically must be under your name and under the same bank. This option may have consequences; having your accounts linked and initiating an account transfer when your checking account runs dry may also incur fees.
However, they can generally be up to $20 less than the cost of overdraft fees. So, this is still the more economical way to save money while avoiding overdraft fees.
If linking checking and savings accounts isn’t the best option for you, consider using a credit account instead.
There is no risk of overdrafting on a credit card, as your card will simply be declined if you reach your limit.
This may result in separate fees depending on the card. But, once again, those fees will be nowhere near as high as those incurred for overdrafting on your debit card.
If none of the above options appeal to you, consider getting a prepaid debit card or carrying around cash instead of various debit or credit card options. If you are having a serious problem with overdraft fees, these options may be the right ones for you.
With prepaid debit cards, you can set strict spending limits for yourself and never worry about overdraft fees. Using prepaid debit cards is also a great way to stay within a budget.
Which leads us to our next slide: setting budgets and alerts.