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Let’s face it, overdraft fees are embarrassing. I think we could all agree on that.
I was certainly no stranger to them. Once I had a little run-in with not one but two overdraft fees that hit my account at the same time. $70 worth of fees were being taken out of my available balance, and I was devastated!
For once I was confident that I had everything under control so I nearly lost my breakfast when I checked my account that morning.
Frantic, I began looking through my transactions to see just where my calculations went wrong.
$20 ATM withdrawal.
$13 beauty supply purchase (don’t judge).
$11 for gas (once again, don’t judge).
All three purchases were pending to post at the same time, although made on separate days. Luckily, after making a quick phone call I was able to get my $70 back. Shew!
Going through the same? Here’s how to get your overdraft fees waived!
Develop a good relationship with your bank
I worked as a bank teller throughout my 4+ years of college. So, I got to witness firsthand just how far a good banking relationship will take you.
When you establish a good relationship with the people handling your money, they are more willing to work with you during your time of need. Depending on where you opened your account, try to squeeze in some time to physically stop by every once in a while so the employees can put a face to your name.
I mention where you opened your account because that is typically the location that has the authority to refund your overdraft charges. Your account is linked to that specific branch, which means it goes on their report.
I’ve been with the same bank for over seven years now, and have gotten to know the employees pretty well. When I spotted my overdraft charges I immediately contacted the branch that opened my account and plead my case to the manager.
Contact your branch first thing in the morning!
As a seasoned bank teller, I was given the authority to refund fees and this was always done first thing in the morning.
Make it a point to contact your branch as soon as they open to increase your chances of catching them in the act of reviewing charges. You can still get your overdraft fees waived even after the transactions are finalized, but it may make the process more difficult since an actual refund may have to take place.
Leave the threats at home
When an issue arises, be polite. If you come storming into the bank making demands you’re more likely to get the “I’m sorry, but…” response.
And please do not threaten to close your accounts. Although it may be tempting when your emotions are running high, these threats often ruin the chance of getting your overdraft fees waived.
As a teller I’ve seen this play out numerous times and, as you can imagine, it rarely worked out in the accountholder’s favor.
Did the manager care about their threats? No.
Did they really close their accounts? No.
Were their fees refunded? Of course not.
Calmly own up to the fact that you made a mistake. Make them believe that your mistake will not be one that is recurring. After all, your account is down in the dumps so if you close your account it isn’t like your bank is going to mourn the loss of your non-existent funds.
Keep all accounts in good standing
When your accounts are in good standing banks are more willing to waive overdraft fees because you’ve proven to be a valuable accountholder.
Think about it. If you are always in the negative then what would motivate them to work with you?
When I reviewed overdraft charges, the first step I took to determine if they should be waived was looking through an account’s history. If you’ve kept your account with a positive balance beforehand, then you are more likely to get your overdraft fees waived.
Trust me, banks want to keep your business if you are a good accountholder so don’t be afraid to ask for your money back.
Tips to stay out of the negative!
Set aside funds for a rainy day
Setting money aside gives you a cushion during those uh-oh moments. When you notice transactions pending that will put your balance in the negative, quickly transfer funds over to cover those charges!
If you’re anything like me, simply remembering to save just isn’t going to happen. Luckily, you can automate your savings which means that the funds are automatically deducted from the account of your choice.
I opt to have a percentage of my paycheck direct deposited into my savings account. Many banks also allow you to set up a recurring transfer between accounts that’s free of charge.
For years I’ve been using the money-saving app Digit to help me save my spare change. It’s designed for those with bad spending habits and allows you to set up multiple sinking funds for different goals!
To get set up, simply connect your checking account and Digit will analyze your income and spending. That’s it! You can try it free for 30 days through this link.
If possible, try to use cash instead of your debit card. When using a debit card it’s easy to lose track of your remaining balance and blow off the purchase since the transaction is happening on the back-end. However, when using cash you’re physically seeing the effect your purchase has on your money. This encourages you to spend intentionally!
Since using the cash envelope system I’ve consistently come under budget because seeing my money go hurts and I love how easy it is to keep up with my balances. I just take a peek inside to see how well (or terribly) I’m doing!
Now, this doesn’t mean use cash for everything, but just those expenses that you struggle with. Our spending problems are typically with variable expenses, which are those that are not a set amount such as groceries.
Remember that your balance may not reflect all of your transactions
This is what trips up a lot of people, including me.
Let’s say you have $30 in your account so you swipe your card at the gas pump for $15 on a Saturday. When you check your account the next day, your balance still reflects the original $30.
Great right? Not exactly.
You know that feeling when you check your account and you have more money than you expected? You’re on top of the world but there’s that nagging feeling that you’ve forgotten something? Well, after being over the moon you make a $20 purchase, not remembering that the previous $15 you spent on gas has not yet cleared.
Come Monday, the $15 gas purchase posts to your account leaving you $5 in the negative. Oh yeah, don’t forget to top it off with that lovely overdraft fee that you now have to try to get waived!
Track your spending
I know, I know, this should be a no-brainer right? Well, common sense isn’t always common…I should know.
Tracking your spending is vital to keeping a positive balance. You may think signing up for online banking is good enough but solely relying on it for the most accurate balance can cost you big time.
If you are a pen and paper type of person, then consider using a checkbook register or spending tracker sheet if you don’t mind doing a little math. If you are more tech-savvy, there are numerous budgeting apps that will do the math for you.
Personal Capital is one that I cannot recommend this company enough! With their tools, you can manage all of your finances in ONE place. And yes, even if you have accounts at different financial institutions.
All you have to do is link all of your accounts including credit cards, 401(k), bank accounts, loans, etc. Once linked, all of your transactions and spending habits are available to view.
Check it out completely free of charge here.
It can be super discouraging when your account goes into the negative, and the extra fees applied by the banks are like salt on an open wound—they sting. Luckily, there are ways to get your overdraft fees waived and ensure that you don’t make the same mistakes twice.
Remember that experience is needed to gain wisdom so use this as a learning experience and KEEP GOING!