• March 28, 2024
  • Posted by General Electric Credit Union
  • 5 read

Sure-fire Ways to Avoid a Checking Account Overdraft

Overdrafts are a drag. Luckily, you can do your best to avoid them by embracing some simple tips. The options below will help you leave checking account overdrafts, and unnecessary fees and penalties, behind. 

The best ways to avoid a checking account overdraft

1. Monitor account balances

The best way to avoid a checking account overdraft is to verify the funds you need are available in your account. In doing so, you’ll know if you have enough for that new phone or your automated monthly bills. Always go off your “available balance” for greater accuracy, as “current balance” does not take pending transactions into account.  

With digital banking tools like online banking or mobile banking apps, you can see your balance in real time and check it as often as you like—even when you’re on the go!

2. Set up alerts

Customize your online banking and mobile account alerts so you know when an account has a low balance. This will allow you to replenish funds or hold off on transactions until you’re able to do so. Text banking can also provide you with a quick snapshot of your accounts, right on your device. 

  • General Electric Credit Union (GECU) Online Banking and mobile app users can text “BAL” to 454545 to instantly see their balance and “TRANS” to transfer money between accounts.1 Or, enable Quick Balance in the mobile app to access a quick overview of your account just by swiping down on the login screen—no logging in required!

3. Maintain a buffer

Maintaining a buffer amount in the checking account can act as a safety net against overdrafts. This buffer should be an amount you’re comfortable with, typically equivalent to one month's expenses. By ensuring the account balance never drops below this buffer, you can minimize the risk of overdrafts.

4. Use overdraft protection

Many banks offer overdraft protection services, such as linking a savings account or line of credit to the checking account. In the event of an overdraft, funds are automatically transferred from the linked account to cover the shortfall. While there may be fees associated with overdraft protection, they are typically lower than the fees charged for overdrafts.

  • GECU members have access to three different overdraft solutions, including free overdraft protection transfers.

5. Keep track of scheduled payments

It's important to keep track of any scheduled payments, such as bills or subscriptions, to ensure that there are sufficient funds in the account to cover them. Be mindful of payment due dates and schedule payments accordingly. Additionally, reviewing and adjusting recurring payments as needed can help prevent unexpected overdrafts.

6. Budget wisely

Creating and adhering to a budget is fundamental to managing finances effectively. By allocating funds for various expenses, you can prioritize essential purchases and avoid overspending. Budgeting also allows you to identify areas to cut back on expenses, freeing up more funds to build savings and maintain a healthy account balance.

  • GECU’s Money Management app lets you set up a visual budget and sends you alerts when you’re projected to exceed a monthly limit in a certain category. With a plan in place, you’ll know how much money is coming in and where money is being spent.

Ready to kick checking account overdrafts to the curb? GECU can help make it happen with Online Banking, overdraft solutions, and account alerts. You’ll always know how much money you have and a safety net if you forget to check. 

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