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How to Prevent Paying Overdraft Fees

Overdraft fees can easily pile up and become a significant expense, especially if you find yourself paying them often. Fortunately, that doesn’t have to be the case.
 

Let’s face it — anyone can make an honest mistake. We may forget to make a deposit or forget that we paid for a bill ahead of time causing a lower than usual account balance. There are several reasons why account holders may make a miscalculation or minor budget oversight — even for the most financially savvy among us.

With an overdraft fee of $29.50 each time Alltru covers an overdraft, it comes with financial consequences. For that reason, here’s how to prevent paying those pesky overdraft fees.

 

First, let’s define an overdraft. An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway and cover the expense (for a fee). In this article, we’ll talk about how to avoid these overdraft fees. Thanks to Overdraft Protection that Alltru offers, you’re covered. Let’s look at what overdraft protection is and why it’s important.

Overdraft protection is an optional service offered by the credit union which allows a payment that you have made to someone like Ameren, Charter, Walmart or even your babysitter to be paid temporarily – even if you do not have enough money in your account to cover it.

 
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Alltru can cover your overdrafts in two different ways:
 
  1. We have standard overdraft coverage, such as a link to a savings account that comes with your account.
  2. We also offer Courtesy Pay, which is a discretionary service that allows us to pay an item presented against your checking account even if it causes the account to become overdrawn.

Here are some benefits to Overdraft Protection and Courtesy Pay:

  • They prevent charges like return check fees from the company being paid, which could be anywhere from $20 to $40.
  • They allow you to avoid being embarrassed or damaging someone’s trust, especially if the payment was to someone who you know really well or frequently do business with.
  • They also consent you to avoid disruptions in service like having your water shut off or not being able to fill your gas tank in your car when you (and your checking account) are on empty.

Understand that there is no limit on the total fees we can charge you for overdrawing your account. This can be both a blessing and a hurdle for you. As your bills and charges aren’t going unpaid, you could be digging yourself a very deep negative balance hole that will be hard to get out of. In desperate situations, overdraft protection and courtesy pay are always there to cover you.

Adding overdraft protection to an account is a practical and relatively inexpensive safeguard against potentially hefty overdraft fees. If you tend to keep a low balance in your checking account and don’t keep a close eye on spending habits, then overdraft protection could be for you. If you’re fortunate enough to keep a cushion of cash in your checking account and make it a point to routinely monitor your account, then overdraft protection may not be necessary.


If you’re on the fence, remember that nothing is set in stone; Alltru is always here for you and overdraft protection can be added or removed from your account at any time.

Visit any of our branches to talk through overdraft protection or give us a call at (636) 916-8300.

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