Being in an increasingly cashless society has its benefits — safety, convenience and earning reward points, to name a few — but it’s not without its shortcomings. Mainly, when you set up automatic payments to your credit card and bank account, it makes it more difficult to keep track of your spending.
This very situation happened to me. Here’s how an accidental overdraft charge almost ended up costing me $110 — and how I got out of it.
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Forgetting About Extra Mortgage Payments
Five years ago, I almost made a $110 non-sufficient funds (NSF) money mistake. I incurred a $45 NSF charge with my checking account. To make matters worse, the NSF charge was for missing my mortgage payment, which meant I incurred a further $65 penalty with the lender. That’s a total of $110 in penalty charges for one bookkeeping mistake. Not only that, I could have hurt my credit history for missing my mortgage payment.
So, how did this happen? I made a big purchase on my debit card and forgot that I had requested a lump sum prepayment on my mortgage a couple of weeks early, which was coming out that week, along with some bills.
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The Squeaky Wheel Gets the Grease
The good news is that I was able to reverse the charges. My mortgage lender agreed to waive the charge, since it was my first time making this mistake. My bank also agreed to waive the $45 NSF charge, but only after I emphasized I was a long-time customer and politely suggested that I would consider switching to a different bank which allowed $250 in overdraft without interest or fees.
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Pay Attention to Pre-Authorized Bill Payments
You might want to think twice before signing up for pre-authorized bill payments, as you can easily forget about them. It’s also important to keep track of money coming out of your checking account, like mortgage pre-payments. It’s worth considering making purchases on your credit card instead of debit card, so you don’t have to worry about your account balance before each purchase. It’s a good idea to always keep at least $1,000 in your checking account just in case, as well.
Lastly, it’s worth considering overdraft protection. It’s a lot better than paying a $45 NSF charge, although it’s important to understand it’s meant to protect you from the odd bounced check and not be used as a line of credit — the interest charges rival that of credit cards.
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More Importantly, Be Nice
Dealing with banks can be frustrating at times, but it’s important to remember that the person on the other end of the line is just trying to help and do their job. They’ll often reverse fees, do larger-than-normal transfers, increase your ATM withdrawal limit, send paperwork and offer other account services, if you are simply polite when you ask. There’s nothing wrong with being firm and sticking to your guns, since the squeaky wheel often gets the grease, but rudeness will get you nowhere.
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