It happened again. Despite your best efforts, your withdrawals hit your account before your automatic deposits, and you found yourself with an NSF fee.
The term non-sufficient funds (NSFs) is a banking term that means a checking account does not have a balance that is sufficient to cover the costs of a transaction or payment.
For example, if you are attempting to make a purchase for $100, but you only have $50 in your account, the financial institution may reject it and charge an NSF fee. NSF fees vary by financial, but they are typically between $24 and $38 per charge (it’s a $32 fee at Verve).
Many times, a lack of funds in the account can be due to the timing and cash flow. However, if you are struggling to make ends meet and living paycheck to paycheck, being charged NSF fees will make getting ahead even harder.
Follow these tips to help stop the cycle of repeat NSFs and avoid any unnecessary consequences.
Keep track of balances
It is important to keep track of the balances in your accounts to avoid paying any NSF fees. Checking your balances frequently will help you know how much you have to spend. Before you make additional purchases, be sure to take in to account any recurring charges that have not yet posted. You can also use the Verve Mobile App to set a budget, categorize spending and see how your spending is tracking against those goals.
If you are consistently checking your balances, you will also be able to reconcile any unexpected changes to your account balance and submit a dispute if you suspect a fraudulent charge.
Set up banking alerts
Even if your account is short on cash, certain payments are still able to go through. Set up alerts or texts so you will be notified before any of these transactions take place. If you set the payments up in online banking, you can reschedule them when the funds are available.
Link a backup account
By linking at least one backup account to your checking account, you should be able to avoid being charged an NSF fee or declined at the register (though overdraft protection fees still apply). Link your checking account to a savings account or credit card so that if additional funds are needed for a transaction, they will be taken from the backup account automatically.
Opt into the overdraft protection program
With Overdraft Protection Plus, one-time debit card purchases and ATM transactions will continue to go through in the event that you are trying to make a purchase that exceeds the amount you have in your checking account. You will still be charged an overdraft fee, but your purchase will not be declined and you will not incur an NSF fee with Verve or the merchant you are trying to make a purchase at.
Call your merchant as soon as possible
After the first NSF fee, you need to contact the merchant as soon as possible in order to avoid them retrying to charge your account. Each time they attempt to charge your account, you will be charged another fee.
Pay the merchant from another deposit account, transfer funds from a savings account or set up a payment plan to resolve the issue right away.
Talk with a financial coach
At Verve, we offer free financial coaching, where you can meet one-on-one with Verve’s certified financial coaches for personalized help with your finances. Verve financial coaches are ready to help you set goals, develop a basic budget, manage financial hardships, improve credit scores and save for the future.
All this talk of unnecessary fees got you thinking of other ways to save money? Check out our blogs on how to find the best deal and tips to help you eliminate debt for more information to help you manage debt.