Manage Your Accounts Wisely and Guard Against Fees

Many of our nation’s more than 8,000 community banks offer overdraft services to their customers who would otherwise inadvertently overdraw their accounts and thus become subject to fees and complications. In a perfect world, consumers would never find themselves in a situation where they may overdraw their account; however, we know our customers encounter situations in which overdrafts happen.

The following tips can help you manage your account wisely to avoid overdraft situations.

* Keep an eye on your account balance prior to writing a check or using your debit card. Prevention is your best medicine.
o Review your transactions on an ongoing basis.
o Use services, such as online banking, your bank may provide to help you keep up-to-date with your balance.
o Remember to record and deduct checks, automatic recurring payments and debit card transactions and to add any deposits that have not yet been posted to your account.
o Do not use your debit card like you use your credit card. Your debit card is like an electronic check and the funds are automatically deducted from your account.
* Ask your bank about all of its overdraft services. Community banks generally offer three types of overdraft services: overdraft lines of credit, transfers or sweeps from a savings account or another checking account, and overdraft coverage.
o Overdraft lines of credit charge interest but provide a safety net. They may also have a transaction and/or annual fee. If needed, disbursements can be repaid over a period of time.
o Transfer or sweep arrangements allow customers to cover overdrafts using their own funds for a small transaction fee.
o Many times a bank will choose to pay an overdraft for a fee to avoid consumers having the inconvenience of returned transactions – embarrassment, fees and hassles from merchants.
o Talk to your community banker about the best choice(s) for you.

During these challenging economic times, consumers are making tough financial choices–more so than they have ever had to do in the past. We want to be sure that consumers manage their accounts wisely. Most community banks provide some form of overdraft services, and do so in a way that best meets the needs of their customers. Remember that community bankers are there to help you.