How online banking can keep you from overdrawing your account

Seeing red? Prevent a negative balance in your account by following these simple tips, many of which can be achieved with a simple enrollment in online banking.

TRADITIONAL BANKING SOLUTIONS
Opt out of overdraft coverage.
Debit card transactions cause more overdrafts than any other transaction type, according to a 2014 report from the Consumer Financial Protection Bureau (CFPB) recently published by NerdWallet staff writer Spencer Tierney. Luckily, since 2010, consumers have had the option of opting out of overdraft coverage, a service that declines debit card or ATM transactions when your account contains insufficient funds. The alternative would be incurring an overdraft fee from your financial institution for the insufficient funds, as well as a returned item fee from the entity receiving your money. Opting out eliminates the additional fee or stops you from making a purchase that would send your account into the red.

Maintain a buffer balance.
Most overdrafts occur due to relatively small sums, often $20 or less. That means you can avoid a lot of overdraft fees by keeping a cushion in your checking account at all times just in case a deposit is delayed or you make a mistake in your register,” says Marcie Geffner of Bankrate.com. U.S. News contributor Simon Zhen recommends a buffer amount equal to the sum of one month’s recurring expenses (rent, utilities, fuel and groceries).

Link an account or line of credit.
Your financial institution may offer the option of linking a savings account, credit card or specified line of credit to your account that would cover an overdraft if needed. “When a transaction causes a negative balance, a [financial institution] will automatically perform an overdraft protection transfer from the linked account to cover the overdrawn amount,” Zhen explains. “Note that [financial institutions] may charge an overdraft protection transfer fee. With a line of credit, you’re simply borrowing from this credit line and you’ll be subject to interest charges, just like any other loan.”

ONLINE BANKING SOLUTIONS
Use online bill pay rather than auto pay.

Automatic bill pay is a great service as far as convenience goes, but it can wreak havoc on maintaining a budget. Instead of setting up auto pay with billers, utilize online bill pay through your financial institution’s online banking. Making the payments manually gives you control over the transaction, so you won’t have to worry about any forgotten expenses pulling your account balance below zero. It’s also a better option than mailing in a physical check, which could take weeks to clear.

Dutifully monitor spending.
Another benefit of online banking is the mobile aspect. Today you can check your account balance anywhere, anytime—sometimes without even manually signing in. Taking full advantage of that increased potential for vigilance can save you big.

Create account alerts.
If you find manually checking your balance to be a bit tedious, automate the process instead. Sign up for alerts through your online banking, which will notify you via email or text message anytime a certain event occurs, such as unusual account activity, an overdraft or falling below a certain amount. Some platforms will even allow you to do this in real time. “When you’re alerted to an overdraft, you may be able to deposit money in time to avoid the overdraft fees,” Zhen says.

By simply being observant and taking advantage of the tools and resources provided to you by your financial institution, you should be able to circumvent overdrafts and their corresponding fees.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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Five Good Reasons to Have a Checking Account

Checking accounts provide proof of payment, security, convenience and help people monitor and budget their finances

It wasn’t all that long ago that having a checking account was a given, since writing a check was often the only way to pay for goods and services. Spending habits have evolved, but checking accounts are more important than ever, providing proof of payment, payment security, ease and convenience, a way to monitor spending and assistance with budgeting.

Proof of payment

Checking accounts are the ultimate paper trail. Not only does the user receive a monthly statement of checking account activity, checks can also be documented in one’s check register (checkbook) and via a carbon copy for those using duplicate checks. Moreover, most financial institutions will store an electronic image of every check and can make it available upon request.

“Checks provide a paper trail or written proof that you paid someone,” notes the EverythingFinanceBlog.com. “Each time you write a check that ultimately clears your account, there will be several records of it. Having this proof is important for tax purposes (when you make tax deductible charitable donations) and whenever you are paying a person or company by mail.”

Payment security

Checks are, of course, a secure way to send payments through the mail, as they have been for centuries. While money orders provide another option, they are more expensive, require a visit to a financial institution or other issuer and are less convenient if proof of payment is needed down the road.

Money orders pose “a paper-trail concern. While money orders can be tracked, it may not be as convenient as having the backing of the [financial institution] in the event your payment doesn’t make it to your creditor,” says MSN.com.

Ease and convenience of payments

Having a checking account also makes it easier to make electronic payments. “There are many ways to conveniently access your checking account that other types of accounts don’t offer” and, unlike savings accounts, “checking accounts have no Federal limits on the number of electronic transfers you can make each month,” from the website EverythingFinanceBlog.com explains.

Monitoring spending habits

Checks, checkbook registers and the monthly statements provided by financial institutions are all great ways to recall recent payments and gain a better understanding of your spending habits.

“If you spend only in cash and do not write down what you spend or where, you lose the ability to have accurate financial records for planning purposes,” adds MSN.com. “[An] account provides a monthly statement, which shows what you spend and where you spend it. These statements may be necessary at some point in your life, especially if you want to buy a home or qualify for a personal loan.”

Developing Healthy Budgets

Opening up dedicated checking accounts for either specific monthly spending needs or for certain members of the family provide an effective way of increasing frugality and meeting budget goals.

For example, husband and wife checking accounts that receive monthly deposits from a general family checking account allow each person to pay for the responsibilities that are expected of them with some room for fun and spontaneous spending that doesn’t go overboard.

“Husband Checking and Wife Checking accounts” give “each parent autonomy to spend however they see fit while still being held accountable for the overall budget amount,” the website FunCheaporFree.com says. “It motivates them to be frugal where possible” and will “help allocate spending responsibilities for a family, making ‘who is in charge of what’ clear and concise, and makes setting and maintaining a family budget much easier.”

There are a number of reasons to keep a checking account—or multiple checking accounts—including proof of payment, payment security, payment convenience and the ability to monitor spending habits and develop healthy budgets. Advantage One can easily add a checking account to your eCount. We also offer a host of online services that can make using your account a breeze. Visit us online, call us (734.676.7000), or drop by one of our branches for more information.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Traveling with Cards

The last thing you think about doing as you’re getting ready to leave for a trip is calling the credit union. It may seem like an odd thing to do, but it really is something that should go on your to do list before you leave for any trip. The reason is that it can help ensure that your debit and credit Cardscards will work when you reach your destination.

The geographic area where your card is active is something that is tracked. When card purchases suddenly show up across the country, or in areas that are far away from where you usually make purchases, it can appear as if your card has been compromised. When atypical card usage is noted, an alert is generated, and many times a hold will be placed on the card. Then we have to get in contact with you to confirm that you were the one making the purchases before regular usage of the card can resume. Obviously that can be a major inconvenience for you, which is the last thing you, or we, want to have happen, especially while your on a trip.

Fortunately, this whole situation is easily avoided by a making a quick phone call. Simply let us know when you plan on using your card far from home and we’ll note it. That lets us protect your account and makes sure that you can use your card when and where you wish without any annoying interruptions.

This leads into one other important habit that you should get into with everyone that you have a card from. That habit is to make sure that your contact information is accurate. In the event that we do receive an alert and put a hold on your card, we need to know how to get in touch with you. So, the next time you’re in one of our lobbies, simply ask to have the teller review the contact information on file. Or give one of our friendly call center reps a call. Any of them are happy to update your information so that we can get in touch with you in case of emergency.

Finally, it’s also always a good idea to have at least a bit of cash, or traveler’s checks, on hand in addition to any cards you may plan on using. That way, if something does happen, whether it’s a disabled or broken card or simply non-functioning ATMs at your destination, you’re covered. Following these simple tips can make traveling a lot less stressful and ensure that you have a good trip.

We love to get feedback from our readers, so feel free to comment. We’ll do our best to answer any questions you may have. Got a topic you’d like us to cover? A question that you’d like to have answered? Comment or shoot us an email!

Protect Yourself from Identity Theft!

When your personal financial information gets into the wrong hands, the consequences can be devastating. It’s critical to understand how identity theft and card fraud can happen to you. The information provided here will help you avoid becoming a victim and tell you what you can do if your identity is stolen.

What to do if your identity is stolen
If you should fall victim to identity theft, it is important that you act quickly. Contacting the correct agencies and filing the necessary reports will go a long way toward minimizing any damage to your financial well-being.

Financial Institutions and Credit Card Issuers
Report the theft to your credit card issuers and request replacement cards with new account numbers. Ask your bank to close affected accounts and obtain new account numbers there as well. If you have checks stolen, you can also ask your bank to stop payment on any checks about which you are unsure.

Law enforcement
Report identity theft to your local police department. If the crime occurred somewhere other than where you live, you may wish to report it to law enforcement there as well. The police will create an “identity theft report” and give you a copy.

Credit Bureaus
Immediately contact the fraud departments of each of the credit bureaus – Experian, TransUnion and Equifax. Alert them that you are a victim of identity theft, and request that a fraud alert be placed in your file. You can also request a security freeze, preventing credit issuers from obtaining access to your credit files without your permission. This prevents thieves from opening up new credit cards or other loans.

Federal Trade Commission (FTC)
The FTC does not investigate identity theft cases, but they can share information that you give them, such as the identity theft report number, with investigators nationwide.

Simple Ways To Protect Yourself
There are some simple steps you can take to reduce or minimize the risk of becoming a victim of identity theft or card fraud.

Practice safe Internet use – Delete spam emails that ask for personal information and keep your anti-virus and anti-spyware software up-to-date.
Shop online only with secure web pages – Check the bottom of your browser for an image of a lock or look for “https” in the address bar.

Never send via email – Never send credit or debit card numbers, social security numbers and other personal information via email.

Destroy personal financial records – Tear up or shred credit card statements; ATM, credit, or debit card receipts; bank deposit receipts; loan solicitations; and other documents that contain personal financial information.

Secure your mail – Empty your mailbox quickly and get a mailbox lock. When mailing bill payments and checks, consider dropping them off at the post office or a secure mailbox.

Be careful with your Social Security number –  Your social security number is a major target for identity thieves because it can give them access to your credit report and bank accounts. Never carry your card with you. Instead, memorize your number and keep the card in a secure place at home or in a safe deposit box. Never write or print your social security number on checks. You may also ask your employer to remove your social security number from your pay check stubs.

Check your credit report at least once a year – Obtain and review your credit report for suspicious activity. We can review your credit report with you here at the credit union, or  you can request a free copy of your report at www.annualcreditreport.com or by contacting any one of the three major credit reporting agencies; Experian, TransUnion and Equifax.

Beware of scams – Always be on the defensive with your financial information. Never give out personal information to telemarketers or respond to emails from someone claiming to represent your credit union, credit card issuer, a government agency, a charity, or other organization. If you think the request is legitimate, contact the agency directly to confirm their claims.

Tips For Frequent Travelers
When you travel be on the alert for opportunities that thieves may try to take advantage of.

Receipts – Do not leave credit card receipts on the table at restaurants; sign them and hand them directly back to the server. Keep your copy of all receipts.

Wallets – Stolen wallets frequently lead to identity theft, so instead of carrying your wallet in your pocket or having it easily accessible in your bag, use travel pouches that are worn inside your shirt.

Checks – Leave checkbooks at home in a locked safe or drawer. Checking account takeover is one of the hardest types of financial fraud to clear up.

Camera phones – That tourist with a camera phone may actually be taking a shot of your credit card or driver’s license. Keep important personal information out of view from others.

Hotels – Lock up all valuables in room or hotel safes while you are out, including laptops, passports and other documents that contain your personal identifying information. Do not leave these items with a hotel doorman to transport or hold—carry them yourself.

Airplanes – Do not put any items that contain your social security number, card numbers, or financial institution account numbers in checked luggage. Always carry that with you.

This content is used with permission of Visa, Practical Money Skills for Life.