6 tips on how to get by with just your checking account
Are you looking for ways to avoid taking on more debt? If you're thinking about living on cash only for a while, here's how to do it with the least hassle.
1. Use a debit card. Debit cards offer many of the conveniences of credit cards. They make purchases easy and help you avoid the risk of carrying around a lot of cash. Debit cards don't offer you a line of credit. Instead, your purchases are deducted directly from your checking account, so you don't have to worry about interest charges.
2. Save for a goal and pay in full. When you live on cash only, you have to save first for each purchase, rather than fund them with credit. Let's say you want to buy a TV. Save up for your goal, and then head into the store and hand over your debit card. The TV is yours, without credit card payments or interest fees.
3. Avoid overdraft fees. If you've signed up for overdraft protection, keep track of how much money you have in your checking account, because if you overspend you will be charged overdraft fees. However, if you don't sign up for overdraft protection, your debit card transactions may be rejected when your balance is running low. Consider opting for the best of both worlds: sign up for overdraft protection, and then keep a large enough balance in your checking account so you don't need to use it.
4. Sign up for online banking and online alerts. With online banking, you can pay bills with optional Bill Pay, track balances and manage your account. And if you sign up for alerts, you can help avoid bank fees by asking to be notified when your account balance drops below a level you've specified or a check you've written has cleared your account.
5. Set up automatic payments. You can live on cash only without worrying about checks getting lost in the mail. Ensure you pay bills on time by automating payments for things like utilities and student loan payments.
6. Protect yourself. Find out how your debit card protects you from fraud. At Bank of America, you can have your photo printed on your debit card to help prevent it from being used if stolen. Also, your purchases are monitored for unusual activity, and you have no liability for fraudulent transactions if you report them within 60 days.
Living on cash only isn't always easy - or the right choice. Some vendors only accept credit cards. Also, using a debit card won't contribute to building your credit score, which affects how much interest you'll pay on loans to purchase a car or a house. So go ahead and live "cash only," but don't ditch your credit cards completely.1
What's next? Personal Finance 101
1 Claims may only be filed against posted and settled transactions subject to dollar limits and subsequent verification, including providing all requested information supporting fraudulent use claim. For debit card transactions, claims must be reported within 60 days of the statement.
Some accounts and services, and the fees that apply to them, vary from state to state. Please review the information for your state in the Personal Schedule of Fees (at www.bankofamerica.com/feesataglance or at your local Banking Center) and in the Online Banking Service Agreement at www.bankofamerica.com/serviceagreement.
