Overdraft fees can only be described as a crazy downward spiral that just continues to put you in a worse and worse position with each passing day and bounced/over-drafted item. According to a 2010 Bank Rate survey the average fee is $29 per bounce; $32 in Houston and Dallas. Ouch. That can sure add up in a hurry.
Chances are it has happened to you at least once. Perhaps this is a rite of passage into adulthood??? Oh yes, they really do mean that they won't cover those items.
You can set up a backup savings account to pull from so that should your account drop to zero you won't incur any of the astronomical fees that are charged per item. You won't have to run around trying to come up with cash to cover all these extra fees that probably weren't in your budget in the first place PLUS the item you intended to pay at the outset.
These days some banks, credit unions too, will offer you a loan to cover any overdrafts. PLEASE don't fall into this trap. This just delays the inevitable, because while they say they are there to 'help' you, the only help they are providing is digging a deeper hole and lining their pockets on the way with your money.
This might seem silly to say, but manage your cash flow so that your account never runs out of money. That means either writing down or keeping track of all auto-draft items that are set to come out of your account. Make a check list if you have to.
The best way to be sure you never run out of money of course is to spend less than you bring in. That includes not signing up to pay for things in three (or more) easy payments. It took a while for me to catch on to that lesson, but if I can get there, you can too. While the first payment might be easy, by the time the second, third, tenth or 40th payments are still coming along, they get more and more difficult. The 100% down plan is still the best idea going. I guess Grandma was right.
Captain Obvious here to remind you, or remind you to teach your children, to not swipe that card or write a check when there is no money in the account. And any idea of 'float' has drained from the financial system, so don't bank on that to keep you from jumping on this crazy train.
This has been a public service announcement.