College is a tuff time for most students. A lot of college students are moving out on their own and paying for their own schooling for the first time. Needless to say, funds are limited and should be very well managed. Sometimes mistakes happen though, and that $20 spent on that meal the previous day is a little more than the $17 in the checking account, and now things get “interesting”. All financial institutions will charge a fee for any account that goes negative, but the severity of the fee is what distinguishes most banks and credit unions. (I can personally say that Chase Bank charges at least $12 more in fees than KeyPoint FCU, and that is before they charge fees for accounts negative for more than a week.) According to a report by The Center for Responsible Lending, a nonprofit group, every time a student overdraws an account, the report says, they are on average shelling out more than $3 in bank overdraft fees for every $1 they are overdrawn. This can cause a major setback in most students’ plans and causes a lot of un-needed stress, and some institutions will charge more fees if the account isn’t brought back to a positive balance within a certain amount of time. Then on top of that, any other purchase that clears the account after it has gone negative will make the account incur another negative balance fee. This can pile up very quickly and just makes the money hole deeper and deeper. With this in mind, there are a few ways to help keep this from becoming a reality.
One of the easiest ways is to just keep some money in the savings account. Most, if not all, financial institutions have overdraft protection nowadays and keeping even $50 to $100 in the savings can get most people out of a slight miscalculation. Now when that $20 food purchase hits the $17 checking account, instead of overdraft fees the savings account will donate just enough money to keep the checking account positive. Be careful though, there is a limit to the number of times this overdraft protection can occur in a single month. Another great way to secure the checking account is to get an open line of credit. At KeyPoint FCU we offer a KeyLine, which is an open line of credit that can be tied into the checking account to keep the checking account positive in the case of large purchase. The funds are sent to the checking account, just like with the savings account, but with the KeyLine the funds are lent to the account owner and can be paid back in time, like a credit card. A KeyLine’s funds can also be taken out at anytime in the form of a cash advance if funds are needed immediately, and again are paid back in time. If you are looking for a way to protect your funds and from incurring unnecessary fees, come to your closest branch or call us to apply today for a KeyLine and keep your money for yourself.
