3 Ways To Avoid NSF Fees

by Pam on December 17, 2012

What are NSF fees?

NSF or nonsufficient funds fees are charged by your bank if you write a check and it bounces due to lack of funds.  Most banks charge a fee of $40 or more, so this is definitely a fee you want to avoid.

You can prevent NSF fees by doing the following:

1. Keep on top of your account balance.

Always keep track of how much money is in your account.  You can easily keep track by using a checkbook and recording your transactions, or by checking your online banking frequently.

2.  Remember that when you write a check you are making a promise.

Even before you write a check, make sure that you have enough money in your account to cover the full amount of the check.  The person who receives it may deposit it or cash it immediately after receiving it so you must be prepared for that.  Keep in mind that every time you write a check, you are making a promise to someone that the funds are available.  Make sure that amount of money is set aside for that check until it clears.  Bear in mind, in Canada, checks don’t stale date until after six months, so if someone takes their sweet time in cashing your check, it is still your responsibility to make sure the funds are available.

3. Use an alternative payment method.

Another way to avoid NSF fees is to simply use your debit card for your purchases, rather than writing checks.  Besides, you can pretty much get away with not writing any checks at all due to the multitude of other options for bill payments, etc.  So, if you are not confident that you would be able to keep track of outstanding checks, just use a different method of payment.  Credit cards can be a great payment option, too, however, you want to make sure you can afford to pay the balance in full each month.

Although it is a good idea to try to avoid all bank charges whenever possible, I would say that NSF fees can easily be avoided by a little effort on your part.  Not only do you want to keep faith with the people you are writing checks to, you also want to save money.  Talk about adding insult to injury if you rack up expensive NSF charges after already having a check bounce.

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