Saturday, March 18, 2006

Two Steps to Take Now to Avoid Bouncing Checks in the Future

Besides having more money, the following are two tips that will help you avoid bouncing checks in the future.

(1) Ensure all of your personal accounts at the bank are linked. I was personally a victim of this with Navy Federal Credit Union (NFCU). A few years ago, I had my money in a NFCU money market account collecting the highest possible yield. I wrote a check for an amount well less than the funds that I had between my accounts only to find out that the accounts were not linked together. After bouncing this check, I asked if my checking account could be linked with my other account and was told NO!

My other bank does this. It routinely will tap a savings account in the event the checking account balance is insufficient. While your results may vary, I highly recommend you ask your teller or customer service representative if linking accounts is possible.

(2) Apply for a line of credit and have that line of credit attached to your checking account. I do this with all of my bank accounts now. In the event your checking account has insufficient funds, funds will be debited from your line of credit. Lines of credit typically run between 10 - 12%. You don't get charged anything if you don't use it. However, short term use in exceptional circumstances can be far cheaper than bouncing a check.

No comments: