How to keep your bank account in the black

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I’ve worked as a personal banker/loan officer for a few years now, and one thing I’ve noticed is that people who live off of their debit card have trouble keeping their bank account positive. Now you have a $3.00 charge at Starbucks costing you $33.00! You know what I’m talking about, it sucks. There’s a reason for this that no one has ever told you, and chances are, your bank is still confused on this concept. I will explain to you what is going on, and HOW to fix the problem.

Now I can’t know exactly what you make and how much you make, but my method is a fool proof method for you spenders. This is what happens…
You go to the grocery store, gas station, etc and swipe your debit card (as a credit transaction). You walk away with your product or service, and being the diligent and responsible being that you are, you immediately deduct this amount from your check book. Right? That is all great and wonderful. When you swipe your card, the merchant (restaurant, store, etc.) puts a hold on your account that you are not aware of that neither you nor your financial institution can fix. These holds typically last about three days, give or take a few. This hold is the merchant’s way of getting their money. Even AFTER the money leaves your account, (say on the second day), that hold is still sitting there… not having been lifted. This decreases the available balance that you have on your account. Still with me? Say you had $100 in your account. You made a purchase of $25.00 with your debit card. That merchant will have a $25 hold on your account, bringing the available balance down to $75. Then, the money leaves your account, taking it down another $25 to available $50. Only once that hold lifts from your account will the actual available balance of $75 be there. What if you had swiped your card five or six times that day? You can easily take your account negative and get slapped with some nice fees that your bank just loves!

How do you fix this? Well, if you maintain a very high balance in your account and this doesn’t matter to you, then don’t worry. If that’s not the case, then listen up. GET RID OF YOUR DEBIT CARD! No one likes to hear this, but it’s time for you to take control of your finances and get it together. Tell your bank that you want an ATM card. Take some time to sit down each week or month (depending on your bill and paycheck cycle) and figure out what you can afford this week to spend. Take the cash out at the beginning of the week and that is what you have. Not only will you be able to keep track of every penny you spend, you will begin to save money. Handing over cash really helps you understand how much money you are actually spending, especially when that nice wad of $20’s winds down to a few dollar bills. This works, I promise you. Even if you have to incur an ATM fee here and there, it sure beats $100 in overdraft charges.

Not only will this keep your account positive and help you to manage your money better, it is safer. Debit cards are no longer safe. There are so many ways to steal your card, steal your card number, steal the authorization code and run off with your money! ATM cards are much safer to you.

I do suggest that you try this method… it has worked for me and every single one of my clients who have actually practiced this. Most importantly, money is not everything. Don’t let it get you down… live life no matter how rich or poor you are.


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