How To Avoid Overdraft And Late Fees
If you have ever missed a payment or gone over your overdraft limit then you will know about the expensive fees that you have to pay. One late payment can trigger a fee that puts you over your overdraft limit, hence leading to another fee. If you want to avoid spending money on bank fees then here are some useful tips to help you.
Create a schedule
The first thing you need to do is to create a payment schedule for the bills that you need to pay each month. If you know exactly when and how much your bills are likely to be then you will be better prepared to pay them when the time comes. If there are bills that can be paid at any time of the month, then schedule a time that is most convenient for you.
Prepare a budget
Once you know when and how much your bills are going to be, then you should create a budget to plan how much money you require each month in order to pay your bills. If there are bills that you are unsure about the exact amount, then it is better to overestimate, as this will keep you safely within agreed monetary limits. Creating a budget will help you to spend only what you can each month so that you avoid overdraft fees.
Agree an overdraft
If you regularly go below the amount of money you have in your account, then try and agree an overdraft with your bank. Although agreed overdrafts still often carry interest rates, the payment amounts are much lower and you will not be charged large fees for an unauthorised overdraft. If your credit history is fairly good then you should be able to agree an overdraft level to suit your needs. If you don't use it then great, but it will be there if you need it and will help you to avoid expensive fees.
Change bill payments
If you have a lot of bills to pay it can get confusing, especially when bills need to be paid at various times throughout the month. If possible, speak to the companies that you are paying bills with and fix a date or two where you can pay most of your bills. This will make it quicker and easier to pay your bills and mean you are less likely to forget.
Another way to pay your bills quickly and avoid late fees is to use online banking. If you have queue at your local branch to pay a bill and you are busy then you might not have the time. With banks shutting over the weekend you might find yourself being a few days late with a payment that will cost you money. To avoid this you should use online banking, as you can make payments whenever you want in just a few clicks. This will help you to make payments on time and save you a lot of money in fees.
Talk to your bank
If you know that there is a chance a payment will be made late, you can always speak to your bank about it. If you let your bank know the payment has been sent then they might be able to waive any late fees. Although this doesn't always work, banks are generally more lenient if they know in advance that a payment will be late.
About the Author: Peter Kenny is a writer for The Thrifty Scot.
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