Managing your checking account
Whether you choose to bank online or go the more traditional bank branch route, you’ll want to pay careful attention to your checking account. Bouncing checks, making late payments, or forgetting to schedule payment for your upcoming phone bill can lead to costly fees and may affect your overall credit score if you become a repeat offender.
Make it a habit to record all banking activity as it occurs. A little maintenance each day goes a long way. The following tips can help you keep your account on track and avoid costly and embarrassing mistakes.
- Keep track of all your ATM, debit card, and credit card transactions. Be sure to maintain a record of all spending activity in your check register, or review your online transaction records, to ensure that you are aware of your account balance at all times.
- Write down all your transactions. Every time you write a check, or submit an electronic bill pay activity, record it. Write down the date, the check number (if applicable), the payee, and the amount. Then, subtract each transaction to keep an accurate running balance.
- Don't overdraw your account. If you write a check, or use your debit card, for more money than you have in your account, the account will be overdrawn and your bank may charge you a hefty fee. Overdrawing your account can also hurt your credit history, and if your bank notifies other banks about your overspending habits, you may be refused banking services from other banks in the future. Also remember that if you bounce a check, the store where you made the purchase may charge you a fee. (You may be able to get overdraft protection for your checking account—but you'll pay interest and fees on the little “loans” the bank gives you to cover your bounced checks.)
- Consider duplicate records. If you just can't seem to get into the habit of recording your checks as you write them, order checks that have duplicates. If you bank online, print a bill pay summary that shows recent payments you have made. That way, you'll have an automatic record of your expenditures.
- Don't assume the ATM balance is correct. If you've written checks or submitted electrontric payments that haven't cleared yet, the balance on your ATM receipt will be more than what you really have available.
- Balance your checking account every month. At the end of each month, compare your bank statement, or print a copy of your online account, in order to balance your checkbook. Compare the bank's information with your records. Review your math and see if you come up with the same final balance as your bank shows. If you see discrepancies or you don't understand how to do this, call the bank for help. You may be charged a fee, but it can be worth it to learn how to balance your checkbook.
- Report any suspicious activity to your bank immediately. The bank can place a freeze on your account so someone else doesn't use it.