Everyone with a bank account dreads those two words that pop up because of a forgotten or miscalculated transaction: non-sufficient funds.
As a result of the hectic lives many people lead, some lose track of their spending habits or make a deposit after depleting an account instead of making the deposit before.
"People must realize that checks written do not appear immediately on their telephone banking or Web banking transaction logs," said an executive of RBC Bank. "At RBC if a check is returned, a $35 fee is incurred, and the customer is notified to make (him or her) aware of insufficient funds."
The number of overdrafts incurred per day depends on the area in which the bank is located and the number of transactions that are processed on a given day, said Georgia Hendricks, marketing officer at Region's Bank.
Most overdrafts in college towns, like Auburn, occur with students' accounts, Hendricks said.
"One of the main ways to avoid overdrawing - especially for students - is to have some type of overdraft protection that connects the primary checking account to a savings account, secondary checking account or credit card with a small line of credit," she said.
Regions has a tiered system based on non-sufficient funds (NSF) fees. The first occurrence on a new account is free. The second and third occurrences incur a fee of $33, and four or more occurrences over a 12-month period incur a $35 fee, Hendricks said.
"Overdrafts can add up quickly, so the $10 transfer fee for overdraft protection can end up costing less than the accumulation of the overdraft fees without protection," she said.
According to the Wachovia Web site, linking a credit card to a checking account will result in a fee of $5 if overdraft occurs, and the transferred amount will be treated as a cash advance.
RBC will pay an overdrawn item in some cases as long as the customer has a history of few-to-no overdrafts, the RBC executive said.
"Repeated overdraft customers don't get that benefit," he said.
Opening a free checking account and keeping extra money for the sole purpose of overdraft protection can be a good way to avoid overdrawing, said the RBC executive.
"Also, don't use your debit card unless you have made your deposit first," he said. "If the deposit takes longer than the transaction to go through in the account, you will probably incur fees for insufficient funds."
If people can discipline themselves to look at their accounts once a day, they will be much less likely to overdraw, said the RBC executive.
Writing down all check and debit card transactions as soon as possible can also help, he said.
"The number one way to avoid overdrawing is to keep a register and log every item that you buy and all deposits you make," he said. "Don't keep track in your head because you might forget something."
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