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By: Caroline Cross

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April 24th, 2019

Simple Steps to Solve Common Financial Issues

Credit and Debt | Saving and Budgeting

Discussions about money can feel taboo, so it’s easy to feel alone when you have financial issues and hard to know who to ask for advice. Besides confiding in a trusted representative at your credit union or bank, below are some ideas that may help you recover from common money mistakes and reduce your anxiety so you can start saving again.   

 

Checking account is overdrawn

Accidentally overdrawing your checking account results in overdraft fees. One overdraft fee can hurt, but if you’ve overdrawn multiple times—receiving multiple fees—the expense can add up. To avoid overdrafts, you have a few options:

One is to set up savings overdraft protection. By connecting your savings and checking accounts, money will transfer from your savings account to your checking account to make sure you don’t overdraw funds.

Another option is to apply for an overdraft line of credit. Instead of using your savings account, this line of credit would be used to cover any overdrafts. Once the overdraft line of credit is used, you will receive a bill for the amount due. Even with interest charged by the line of credit, you will save money by avoiding an expensive overdraft fee. Overdraft fees on accounts average around $30 per item at many financial institutions. 

 

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Used an ATM that charged a fee

Your financial institution’s ATMs belong to a network, and you will be charged a fee when you use machines outside of their network. To avoid fees, use the ATM locater on your financial institution’s website or app downloaded on your phone to find the in-network ATMs closest to you. You’ll find there are ATMs available nationwide, and not just in your local area, that you can use without being charged fees. 

  


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Forgot to pay a bill

As happens when you overdraw your checking account, you will earn a fee if you forget to pay a bill. Depending on the type of bill, if it is over 30 days late, the vendor may report the late payment to the credit bureaus. The best thing to do when you forget to pay a bill is contact the company and explain what happened. If it’s a one-time occurrence and you have never missed a payment in the past, they may be willing to waive a portion or all of the late fee. Just keep in mind that late fee forgiveness will not be granted every month. To prevent late payments, consider setting up automatic payments from your checking account, or recurring payments in Bill Pay within your financial institution’s online banking platform. There are also money management apps available that you can download onto your phone, allowing you to keep track of due dates. 

 

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Store credit cards are costing a fortune

The immediate benefit of opening a store card is getting a discount on your purchase. Store cards, however, can end up costing you more than the discount you receive if you don’t pay them in full each month. Interest rates on store cards can be around 20% and if you pay only the minimum, the interest owed is expensive. If you do open a store card, pay it in full each month to avoid paying interest. For your existing cards, pay more than the minimum due to reduce your overall interest cost and pay them down as quickly as possible. To avoid the temptation to use the card again once it is paid off, consider closing it and paying for future purchases in cash. Closing a card you’ve had for a long time will affect your credit rating, so if there are no annual fees, you may consider keeping the account open but not using it (or cutting it up). 

 

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About Caroline Cross

Caroline Cross is a the branch lead at VSECU's Williston Branch. Her daily interactions with members can range from opening accounts to closing consumer loans. Caroline lives in Williston with her husband and two children.

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