Avoid OD's and Bounced Checks

We live in a society that is very consumer driven and often people lose sight of just how much they are actually spending, how many checks they are writing and how much debt they are piling on to their credit cards.

At Reliabank, we want to help you get more out of your money and make smarter financial decisions. And to help our valued customers avoid the hassle, expense, and embarrassment of overdrafts here are some steps you can take to protect yourself.

The best way to avoid overdraft and bounced-check fees is to manage your account so you don’t overdraw it. It's as simple as that. A few minutes a day writing transaction into your check register could save you big dollars in overdraft fees.

Keep an eye on your account balance by using Reliabank's free online banking. Check your balances, transfer between your accounts and see what checks have come through your account. Anytime. Anywhere.

Pay special attention to your electronic transactions. Record your ATM withdrawals and fees, debit card purchases, and online payments.
Don't forget about automatic payments. If you have automatic payments and deductions from your account, such as your mortgage payment or health club fee, remember to set aside money for them and to record them in your register.

Record all transactions immediately and do not assume that they will take days to post to your account. Information from checks that you write to pay for purchases or expenses (such as credit card or utility payments) may be used to make a one-time electronic transfer from your account. Funds from these transactions may be withdrawn from your account as soon as the same day you make the payment.

Review your account statements each month. Sign up for free eStatements with Reliabank and get you statement mailed directly to your Inbox! 
Sometimes mistakes happen. If you do overdraw your account, deposit money into the account as soon as possible to cover the overdraft amount plus any fees and daily charges incurred. Depositing money into your account can help you avoid additional overdrafts and fees.

What are some other ways to cover overdrafts?

Link your checking account to a savings account you have with the bank. If you overdraw your checking account, we can transfer funds from your savings account to your checking account.

Set up an overdraft line of credit. You need to apply for a "line of credit" just as you would apply for a regular loan. If you overdraw your account, the bank will lend you the funds by using your line of credit to cover the overdraft. You will pay interest on this loan, and there may be an annual fee. But the overall costs may be less than the costs for a return check or overdraft charge.

The best rule of thumb is this: Good account management is the lowest-cost way to protect your hard-earned money.

Helping Students Handle Credit Wisely

As the nation’s college students head back to school, and with a growing number of them planning to use credit cards during the school year, the Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks, including Reliabank, want to encourage students to be responsible when using their credit cards so they can maintain their finances and establish solid credit.

New rules governing credit cards aimed specifically at protecting students went into effect in February 2010. Credit card companies are now prohibited from issuing cards to anyone under the age of 18, and those under 21 need either an adult co-signer or proof of income. Educational institutions must disclose any agreements they have with credit card companies that market to students, and credit card companies may no longer entice students with free gifts. All other provisions in the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act that cover consumers—such as advance notice of changes, more time to make payments and terms that are easier to understand—apply to students as well.

But even with these safeguards, the best protection against getting deeply in debt is knowing the pitfalls and how to avoid them. ICBA offers the following tips to help students use credit cards wisely:

• Set up and follow a budget that includes paying off a credit card balance. “Maxing out” or charging up to your card’s credit limit can make sticking to your budget more difficult.
• Remember that cash advances, unlike purchases, generally have finance charges that apply immediately.
• Pay on time, every time. Whenever possible, pay more than the minimum payment owed (for example, 150 percent of the minimum) to pay off the balance faster and save on finance charges.
• Keep records of your account number, expiration date and the phone number of your card issuer in a safe place.
• Keep your account information confidential.
• Never give out your credit card number, card verification number (which appears on or near the signature panel) or expiration date over the phone, unless you initiated the call and know who you’re dealing with.
• Elect to receive your statement information online. Many sites offer an alert for unusual transactions and reminders of when your bill is due.
• Consider making your credit card payment online wuth Reliabank's free bill pay, to ensure it is received by the monthly due date.
• Routinely access your account information online to track your spending and to quickly identify fraudulent transactions. If you see a transaction that is not yours, notify your card issuer immediately.
• If there’s an error on your account, report it immediately by notifying your card issuer. Look for complete instructions on your monthly statement or your bank’s website and follow them carefully to protect your rights.
• Keep a copy of your sales receipts so you can compare what you bought with the charges on your bill.
• When making online transactions, be sure the site is secure. Don’t let others see you enter card information.
• Don’t lend your credit card to anyone, not even a friend. Ever.
• If you move, notify your card issuer immediately.

If you want to learn more about credit cards and how to manage your credit, we encourage you to stop in and visit with a Reliabank employee. As a community bank we are a common-sense lender that provides credit cards as a valuable service to our customers.


~Reliabank and ICBA

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The New Consumer Protections on Credit Cards: An Overview

Prohibitions and Restrictions on Interest Rate Increases: Card issuers generally can’t increase the interest rate on a credit card for one year after an account is opened, and after that, the rate can generally only rise on new transactions. However, there are several exceptions that allow for rate increases during the first year and on existing balances. For example, card companies can increase the interest rate on an existing balance when the advertised, market-based “index” (such as the prime rate) that a variable-rate card is tied to goes up, a promotional rate expires or the consumer is more than 60 days late on payments.

Card issuers also must generally provide a 45-day notice before applying an interest rate increase to new transactions (those made more than 14 days after the date of the notice). For example, if customers receive a notice from their card company stating that the Annual Percentage Rate will increase to 24.9 percent, and the notice is provided July 1, that higher rate would apply to transactions made on or after July 16. However, interest on new transactions would only be charged at the higher rate if there is still a balance due after August 15 (the close of the 45-day notice period). As always, if you pay the balance in full by the due date, you can avoid interest charges.

Restrictions on Fees: As with a rate increase on new balances, card issuers also must generally provide a 45-day advance notice of other significant changes, such as new fees or increases in existing fees. However, in addition, cardholders must be notified that they now have special rights when they reject a change in fees. Those who say they want to cancel the account because of the change cannot be required to immediately repay the outstanding balance. The card company can either continue offering the existing payment method on the outstanding balance, give the consumer five years (or more) to pay the balance, or increase the minimum payment up to double the current level.

In addition, consumers will no longer be charged a fee when a transaction causes an account to exceed its credit limit unless the consumer has agreed in advance.

And, initial fees are significantly limited for subprime cards (for consumers with a limited credit history or a bad credit record). In the first year, and with the exception of three types of fees — those for late payments, going over the credit limit or returned payments due to insufficient funds — total fees cannot exceed 25 percent of the card’s initial credit limit.

Note: Proposed rules governing card fees are pending at the Federal Reserve Board. One proposed rule would prohibit credit card issuers from charging penalty fees (including late payment fees and over-the-limit fees) that exceed the dollar amount associated with the consumer’s violation of the account terms. Another proposed rule would ban inactivity fees. Final rules will take effect on August 22, 2010. For updated information, visit http://www.federalreserve.gov/