How to Avoid Overdraft Fees

Careful statement review can prevent unexpected fees

Let’s just begin by putting it out there: it’s happened to all of us at one time or another. By “it” we mean overdraft fees. Yep, even financial gurus have had the occasional slipup and had to fork over several (maybe a lot!) of our hard-earned dollars because we inadvertently let our account go into the negative. But good news! We’re here to break it down for you, with some of our favorite tips for avoiding unexpected fees.

What are overdraft fees anyway?

Overdraft is financial-speak for: “Oops! You spent more money than the available balance in your account.” That could result from any type of withdrawal transaction, such as a check you wrote, an ATM withdrawal, or a debit card swipe. When that transaction hits your account and there isn’t enough money in the account to cover it, it’s called an overdraft and most financial institutions impose an overdraft fee each time that happens.

According to a recent study by Bankrate, overdraft fees dropped in 2023, but at an average of $26.61 per occurrence, it doesn’t take long for those fees to add up fast. And it can get worse. When returned checks are involved, the merchant you paid will also likely impose a returned check fee and might even hit you with interest charges on the balance owed.

Needless to say, all that can really set you back from achieving your financial goals. Let’s talk about how you can avoid overdraft fees.

Understanding your available balance

A lot of people get into overdraft trouble because they don’t know the difference between the available balance and the current balance on their account, so here’s the deal.

The available balance is how much money is actually available, right now, for transactions. For example, if you deposit a particularly large check, it’s likely only a portion of those funds will be available immediately since it will usually take a financial institution some number of days to verify the funds. The current balance, on the other hand, reflects any pending transactions that haven’t yet cleared your account.

So, remember to always look at the available balance if you’re even a tiny bit concerned you might not have the funds to cover a transaction.

Get familiar with your account statement

Using BluPeak’s mobile app to check your account online is our hands-down, No. 1, easy-peasy, favorite way to ensure we don’t accidentally incur an overdraft when we’re out and about. Simply log in and you can quickly see which transactions have cleared, what’s still pending, and where your available balance stands.

But don’t stop there.

We get it. Not everybody looks forward to reading their monthly account statement as much as we do (we know, we’re total money geeks!), but trust us, your statement has tons of useful information that you’ll want to know about if you want to avoid a range of unexpected fees.

While credit unions like BluPeak generally charge fewer and lower fees than banks, even we have to charge some fees, and unfortunately, we don’t have control over fees others might charge.

One of the biggies we really hate to see are fees members incur from using out-of-network ATMs. Between our own branch locations, shared branch network, and a nationwide network of surcharge-free ATMs, there’s almost never a need to incur out-of-network fees. By carefully reviewing your account statement, you can see where you might be needlessly racking up ATM fees.

Your account statement will also clue you in when your account drops below the minimum balance required on certain accounts that have minimums. With BluPeak, enrolling in eStatements is an easy way to avoid most monthly account service fees, and you’ll be able to quickly see on your statement if you’re passing up that simple way to save.

Want to learn more?

These are just a few ways you can reach your financial goals faster by keeping more of your money and avoiding unexpected fees. For more financial tips, visit our Financial Education & Counseling page.

This information is provided for educational purposes only and is not intended to be financial advice. Must meet membership and account criteria. Insured by NCUA. Mobile and data rates apply when using mobile banking. Refer to the Schedule of Fees and Charges for more information on BluPeak fees.