3 Ways to Protect Yourself from Overdraft Fees

3 Ways to Protect Yourself from Overdraft Fees

$34 billion. That’s how much money consumers spent in overdraft fees in 2017, “according to a MarketWatch report on data from financial research firm Moebs Services,” which is “the most the country has paid since 2009” (Forbes). Unfortunately, overdraft fees can happen to the best of us—which is why it’s important to understand your options and be proactive in protecting yourself (and your money) from unnecessary fees.

First off, let’s recap. What are overdraft fees exactly? In short, overdraft fees happen when you attempt to make a purchase, but have insufficient funds in your bank account—something that the vast majority of Americans have experienced (typically at the least opportune times).

And we get it, with your never-ending to-do list and growing amount of responsibilities (hello, adulthood), it’s easy to understand how you can overdraft your account, especially when payday is just around the corner.

Instead of keeping your fingers crossed when it comes to close-call transactions, we encourage our members to explore their options and take advantage of programs like, American Heritage Credit Union’s overdraft protection program, which provides members three options for protecting their funds and keeping money in their pocket (instead of subjected to fees). Check out the three options below:

Option 1: Overdraft Protection By Linking to Another Deposit Account 

This option offers overdraft protection in scenarios where you may have insufficient funds in one account, but are able to link to another deposit account, allowing American Heritage Credit Union to pull the necessary funds from this other account (and avoiding a fee penalty in the process). The good thing about this option is that it applies to all transitions and is an automatic process, as it transfer funds to your checking account from another account.

What’s the cost? When selecting this option,  American Heritage Credit Union members receive up to 6 transfers per month for free, and any additional transfers are $10 each. 

Option 2: Line of Credit Services

Similar to option 1, this option may prevent overdraft fees by linking your account to a line of credit you have at American Heritage Credit Union for a finance charge (please note that overdraft lines of credit are subject to credit approval).

What’s the cost?Given the connection to your credit services, this option is subject to interest. Note that this option is free up to 6 transfers per month and costs $5 per transfer thereafter.

Option 3: Overdraft Privilege

Overdraft privilege is a great option for our members that allows you to overdraw your account up to the disclosed limit for a fee in order to pay a transaction. In addition, even if you have overdraft protection, overdraft privilege is still available as secondary coverage if the other protection source is exhausted.

What’s the cost?The cost for this option is $10 per item fee for resulting negative balance less than or equal to $25, and there is a $24 per item fee for resulting negative balance greater than $25.

For more information on American Heritage Credit Union’s overdraft protection program, give a member of our team a call at (215) 969-0777 or email us at memberservices@amhfcu.org