The Undesirable Gift
Kim enjoys giving gifts to her friends, co-workers, family members, and herself. She loves the holiday season. Store shelves are stocked with bright, shiny items. Joy is in the air, and sale signs are abundant. There are so many things for her to purchase!
This year she is trying to enjoy the holiday season with less expensive gifts. Last year she overspent. As a result, she received a “gift” of three overdrafts from her bank. They cost $35.00 each. Kim has learned what an overdraft is and how to avoid one.
When a person writes a check, withdraws money from an ATM, uses a check/debit card to make a purchase, or makes an automatic bill payment for more than the amount in his or her checking account, the account is overdrawn.
The bank has the choice to either pay the amount or not pay the amount. If it pays, an overdraft fee is charged to the account holder. If the bank returns the check without paying it, the account holder is charged a “non-sufficient funds” fee. In addition, the person or store where the transaction was made may charge the account holder a fee as well.
In order to prevent overdrafts, Kim has made some changes in how she manages her money. She is diligent about keeping her account register up-to-date. She records all checks when she writes them. Her transactions are mostly electronic. She has gotten into the habit of recording all her ATM withdrawals and fees, as well as check/debit card purchases and online payments, on a daily basis.
Kim reviews her account statements each month. Plus, in between statements she will often call the 24/7 automated bank number, check online, or use an app on her phone to find out what payments have cleared and her current account balance. Kim does not plan to receive any undesirable gifts from her bank this holiday season.