7 Banking Mistakes You Might Be Making
Banks want your money. Strangers want your money. And mistakes happen. If you're not careful, your banking behavior could cost you, or at the very least cause you a major headache. Do yourself and your balance a favor and read below for seven common missteps you might be making.
Not reading through your bank statements and transactions.
The advent of online banking and banking apps has made the habit of balancing a checkbook somewhat moot—although there are still many proponents of the practice, and it certainly can do no harm. That said, at the very least, you should be reading through your bank statements and transactions so you can catch errors, unexpected fees, or suspicious charges and so you know when your balance is low. Your bank won’t go out of its way to let you know you have an impending fee unless you set up an alert, so you have to look out for Number One.
Banking in public.
Under no circumstances should you ever access your bank’s website, or even your personal email account (which may have valuable information), from a public Wi-Fi hotspot, on a public computer, or from any type of insecure connection. Hacking and identify theft are rampant these days, and your bank account can easily be accessed if login information gets into the wrong hands.
Not reading the fine print.
Before you sign up for a new checking or savings account, and every time your bank announces a change on the terms and agreements of your account, read through the paperwork thoroughly. The fine print may reveal it’s begun charging you all manner of fees, for instance not going paperless or not maintaining a minimum balance. If you see a change you’re unhappy with, maybe it’s time to switch banks.
Paying for your checking account.
Most basic checking accounts are free, or banks waive fees if you set up direct deposit with your employer. If you’re paying a monthly fee for checking, you should move your money elsewhere—stat. Need to find one? Search BankRate.com.
Not making your savings accessible in an emergency.
It’s wise to keep your checking and savings accounts in separate banks so you’re not tempted to dip into your savings for rainy-day funds, but make sure your savings funds are still accessible when you’re in a pinch. Should an emergency arise and you need to access those funds quickly, you should be able to get them at a bank nearby or via wire transfer.
Always using a debit card.
Most of us have probably experienced an error on the total being charged to our card. Maybe you were accidentally rung up for an extra carton of milk, or perhaps your cashier didn't mean to add that extra zero to the end of your bill. When you catch it, the charge is then voided, and the correct transaction is run. It happens, thankfully not frequently. If you use a credit card, your credit card company will give you a charge-back, or refund, pretty swiftly, but debit card transactions will actually immediately remove the funds from your account, and it can take days to be reimbursed. If your balance is low, this could put you in a sticky situation. If you can use your credit card responsibly and pay your bill in full each month, consider using it instead. Or, use cash or checks when you can to lessen your risk.
Signing up for overdraft protection.
Most banks will try to sell you on overdraft protection, which allows you to make a charge even when your balance is zero or nearing zero. It may sound like a smart thing to sign up for, but it’s costly. The bank will cover you when you overdraft, but then it’ll ding you with a $35 (or so) surcharge. These charges can add up quickly if you’re not careful. Instead, first and foremost, don’t spend more than you have. Secondly, always have an alternative method of payment accessible to you, such as a credit card with a low balance or an emergency stash of cash in your wallet or car.
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Any mistakes to add to this list? Tell us in the comments below.