Insufficient funds. Balance: -$127. Four purchases less than $3 just cost more than a college student's paycheck because of overdraft fees.
Most banks charge more than $30 each time their customers make a transaction that exceeds the money in their accounts.
When students arrive at a university, it is often the first time they must manage their own money.
Bank policies on overdraft fees and excessive charges are one of the first things students must master before being able to manage their money correctly.
"I went to Nashville and expected my card to be denied when I didn't have any more money, but it wasn't," said Daily Thomas, junior in agriculture economics. "I wish I would have known that you can overdraw on a debit card, and I wish I would have kept up with my balance in a register."
It is important to be aware of the bank's policies, so there is less confusion when making transactions.
Without checking the balance of their accounts many make small purchases and are shocked when the overdraft fees pile up. Overdraft fees can accumulate to high amounts when the account is not managed on a timely basis.
Some students write down all of their transactions in a register, even if they use online banking.
"I keep track of how much money is in my account," said Brendan Morgan, a sophomore in computer science. "When I get a receipt, I go home and write it in my register."
Unlike most students Morgan said he has never overdrawn his account because he keeps close tabs on his account.
However, technology has almost eliminated the use of checks in the current generation, so writing down transactions in a check register has become outdated.
Some banks, such as BBVA Compass, now have a feature that allows their customers to receive information about their accounts through text messaging.
Customers can check their balances, transfer funds and even see pending items, said Patrick McDuff, a financial sales representative at BBVA Compass.
McDuff also said it may be a good option for some students to use a credit card with a low limit during college.
"If you have a good credit card, you can use it to make purchases and then pay it off on time at the end of the month," McDuff said.
Using a credit card responsibly allows students to avoid accidental overdraft fees and also builds good credit which is valuable when trying to purchase larger items such as a house or car later in life.
Beginning in 2010, some banks, such as Regions, will introduce a new benefit for their customers that will help them avoid excessive overdraft fees by limiting the number of fees given in a day.
"Regions has made the decision to eliminate all overdraft fees for all transactions when customers overdraw their accounts by less than $5 and will charge customers no more than four overdraft fees per day," said Randy Newton, branch manager of Regions in Auburn.
Other banks, such as Auburn Bank, don't offer overdraft protection.
When customers use debit cards and don't have the money in their accounts, the bank will not pay for the transaction and therefore will not charge overdraft protection fees.
Instead, the card will be denied. Also, the bank will not pay when a customer writes a bad check.
This way the customer is solely responsible for the money they withdraw from their account.
"Overdraft protection can send people further into debt if they don't know how to manage their accounts," said Jo Hall, executive vice president of operations at Auburn Bank.
Hall said customers should always keep a certain amount of money in their accounts so they don't accidentally overdraw.
Scottie Arnold, vice president of operations at Auburn Bank, said it is important for college students to know that customer service representatives at their banks are there to help them learn how to manage money and can offer advice to help students learn the basics of bank accounts.
"If you do have a problem, come in and we'll work with you," Arnold said.
Overdraft protection can be a benefit, or it can cause major problems. Regardless of advances in technology, most banks agree the easiest way to avoid fees is to record all transactions in a register.
They suggest students keep receipts, bills and a certain amount of backup money in bank accounts to ensure no extra fees.
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