A checking account and debit card are among the best tools you can use to manage your finances. But how you play with them matters a lot.
Checking accounts can help business owners to keep a better track of their spendings. By recording your checking and debit purchases, you become more conscious of what you’re spending your money on.
Based on how you use your checking account, you might be short-changing yourself without even knowing.
Some people are only concerned about their checking account balance. While this is the most important thing, there are a couple of other important things to consider to ensure you’re getting the most out of your checking account.
Here, you’ll find some common mistakes to avoid with your checking account. Let’s get started:
1. Handling Your Checking Account Like a Savings Account
Checking accounts are usually meant for paying bills and everyday spending. A savings account, on the other hand, helps you to achieve your financial goals. Confusing the two leads to a checking account mistake you should avoid.
Here is why you should keep your savings account separate from your checking account.
Interest
Generally, money in a checking account doesn’t earn interest. This means you might be leaving money on the table by keeping your savings in a checking account.
Accountability
People are more likely to spend additional money if it’s not kept in a savings account. The more money you have in your checking account, the more you’re likely to spend.
Security
While money meant for day-to-day spending is usually kept in a checking account, you might need to have money in a separate account for long-term savings or emergencies. You could be exposing your checking account to scammers when making purchases with your debit card.
2. Having Inadequate Money to Cover Your Business Expenses
Your number one priority regarding your business checking account should be to ensure that you have adequate money to cover your expenses, even if you’ve subscribed to direct deposit or autoplay services.
By choosing autoplay services, you’re basically letting machines control your finances, which are convenient but not always accurate. Not having enough to pay your bills might lead to overdraft charges, which will, in turn, affect your credit score if you fail to pay on time.
We would advise you to ensure that your checking account has enough money to cover your business bills by continually checking your auto-deposit payments.
3. Sticking with a Costly Checking Account
For how long have you stayed with your current bank? Maybe 5, 10, or even 15 years, right?
We have no issue with your bank. However, you should ensure that your bank is not charging you higher checking account fees. It can be in terms of monthly maintenance fees, overdrafts or ATM withdrawals.
Switching to a bank with lower checking account fees can save you money.
4. Failure to Take Necessary Precautions When Ordering Checks Online
While ordering checks online is easy and convenient, not being careful with your debit card number can expose your checking account to fraud.
If you are used to using checks, you know the cost of checks can add up very quickly. If your bank does not provide free checks, you might want to order them from somewhere else.
For instance, you can save money by ordering business checks for offices online. However when using your debit card, avoid saving your information on any website, and ensure the site you’re ordering from is encrypted.
5. Not Checking Your Account Balance
It is crucial to keep an eye on your checking account balance to avoid overdrawing. Before you make a purchase, write a check or make a withdrawal, be sure to check your account balance to ensure you have enough funds to cover the transaction.
6. Not Checking Your CheckCard Transactions
Some transactions on the CheckCard take longer to post than others. So, when checking your balance and activity, be sure to take account of any transactions you’ve initiated but are yet to reflect on your account. This will help you to determine how much you can withdraw or spend.
7. Ignoring Text and Email Alerts
Your bank can send you text and email alerts from time to time to update you on your finances if you want.
If you skip these alerts, you might lose track of your money. That could make you incur overdraft fees due to overdrawing. We would advise you to set an alert any time there is a new debit transaction in your checking account to get a clue on any suspicious activity.