Small habits that can help you avoid overdrafts

Sofía was checking her bank account on her mobile phone. She thought she knew exactly how much money she had, but the balance didn’t match.

– “This doesn’t add up,” Sofia said.
– “Let me see… Hey, that’s strange!” Ernesto replied.

Upon closer inspection, they realized there were charges they didn’t recognize.

If you can relate to this situation, the good news is that both overdrafts and unexpected charges can be avoided. Let’s start with the basics.

What is an overdraft?

An overdraft occurs when your account ends up with negative balance because your payments or withdrawals exceed the funds available in it. The bank covers the transaction, and you are then responsible for repaying the amount.

This can happen, for example, when:

• An automatic payment you didn’t remember is processed

• You make a payment with insufficient funds

• A subscription payment is processed for a service you forgot you were still paying for 

• You made a payment over the weekend, and it was debited days afterward

Charges on your account

Some accounts require maintaining a minimum balance or meeting certain conditions. If these requirements are not met, a monthly maintenance fee may apply. To prevent this: monitor your balance regularly, understand your account’s minimum balance requirements, and choose the account that best suits your usage. 

Remember that certain fees may reduce your available balance on the day they are processed, such as service fees, check order requests, and card replacement fees, among others.

When these charges reduce your balance, you may incur overdrafts when other transactions are processed later that same day.

Electronic Transactions

Before making a transaction, check the processing cut-off time for services such as ATH Móvil and TelePago. If you make a transaction after that time, it may not be processed until the next business day. Even if funds appear to be available in your account, this could result in an overdraft if other transactions are processed first.

Strategies to help you prevent overdrafts and fees

 

1. Activate balance alerts

Set up Mi Banco Alerts to receive notifications on your phone about your available account balance.

 

2. Check your account frequently

Use the Mi Banco app to monitor your balances from anywhere. Take a few minutes to check your current balance, confirm transactions, and identify any irregular activity.

 

3. Get electronic statements

Say goodbye to paper. Subscribe to the free e-Statements service to receive an email with access to your account statement.

 

4. Check your recurring payments

Make sure you have enough funds before electricity, water, mobile phone, loan, credit card, and other payments are debited. Also, keep an eye on subscriptions (streaming services, apps, memberships), automatic recurring payments, digital purchases, and charges on your cards.

 

5. Schedule payment dates according to your income

Reduce the risk of running out of funds. A payment calendar can help you stay organized and on track.

 

More control, fewer surprises

Avoiding overdrafts and fees isn’t complicated. It’s about building simple habits, staying informed, and using the tools Popular offers to help you stay in control of your finances.

 

 

Services offered by Banco Popular de Puerto Rico. Member FDIC. The suggestions and recommendations contained in this piece are provided solely as financial guidance or orientation. ¹SMS Alerts and Notifications is a free service that Banco Popular of PR offers its customers. Text message or data overage charges may apply depending on your mobile service plan. Consult your service provider to learn more about your plan. ATH Móvil is a service of the ATH^® Network by EVERTEC Group, LLC.