PERSONAL FINANCE MANAGEMENT

What Are overdraft fees, and How Can I Avoid Them?

What is a Credit Union? Simply put, it’s an organization that allows its members to pool their resources and benefit from the shared expenses. The members of a credit union can be any individual or company, from retailers to financial service corporations to manufacturers. All have one important thing in common; they are all considered community property. That means that all of the resources of the credit union are considered to be part of the community and the obligations of the credit union become binding on the members of the credit union.

How do Credit Unions work? Credit Unions is formed by a member-elect or by an entire board. To become a member of a credit union, one must join with at least one other person. At the time of joining, each member must designate one representative to the board who will serve as the fiduciary. This representative serves as the person who oversees and advises the other members of the credit union on issues that come up. Once a member makes a decision regarding a particular matter, the representative on the board will notify the members.

What is a Credit Union? Credit unions are governed by a central governing body called the National Credit Union Administration (NCU) which is responsible for the regulation of all credit unions. The Secretary of State of each state also serves as the regulating authority for statewide federal credit union debit card accounts. The NCSU also sets and implements standards for the maintenance of each credit union and for each member bank.

How are Credit Union debit card accounts funded? Credit unions generally use their own funds to operate their debit card accounts. In some states, the state government may provide loans to help under-privileged members obtain card accounts. Some communities have developed their own budgets for operating these accounts. These budgets are then used to pay the costs of services provided by the credit union.

How are Credit Union overdraft fees determined? Charges for an overdraft differ from one credit union to another. Different banks use different criteria for setting their overdraft fees. For example, a bank that serves a rural community might have lower fees than a national bank that provides services to a downtown area. Many communities also have special fees for ATM usage. You can find out the exact fee schedule for your particular credit union by visiting their website.

Can I be charged excessive fees if I go overdrawn on my card? Banks cannot force you to pay overdraft fees. Although they can assess reasonable overdraft fees against you, they cannot legally require you to pay them. If you do choose to overstay on your account, the bank may temporarily cease your access to all cards until they recover the money that you owe them.

What are some of the other fees that I can be assessed if I go overdrawn on my card? overdraft fees vary greatly from one credit union to the next. Some charge flat fees for any amount that you overdraw; others charge a fee per day or per month. Still others have a minimum daily or monthly balance that you must maintain in order to be allowed to remain an account holder. You should always check with your credit union to make sure that you are not being charged an overdraft fee when you are close to paying off your balance.

I accidentally deleted my last bank account statement. How will I get it replaced? Most credit unions replace missing or inaccurate transactions with new transactions fairly quickly. You should contact your bank immediately so that they can begin to process your new statement. They will likely charge you a modest fee for this service. Your best course of action is to simply wait until your statement arrives in the mail.

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