Dave Ramsey Says to Run Away From Any Bank That Doesn't Offer This Feature

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KEY POINTS

  • There are many different banks you could open an account with.
  • Finance expert Dave Ramsey suggests finding a bank offering important alerts when your balance is running low.

Does your bank offer it?

When you are selecting a bank to open an account with, there are many different things you want to consider. Obviously, the types of accounts on offer matter as do the account fees (if any) you'll be charged. 

In addition to these features, though, there's one key option that finance expert Dave Ramsey says you should make certain your bank offers. Here's what it is -- and why Ramsey believes it's so important.

Don't use a bank if this feature isn't on offer, Ramsey says 

When offering tips on how to select a bank, Ramsey advised that you make certain your bank allows you to receive alerts if your account balance is low. He believes that having the option to set up these alerts is so important that if a bank doesn't offer it, you should run away.

"They're not even giving you a sporting chance to avoid the fees," Ramsey said, referring to banks without this type of account alert. "You can find a better bank than that."

Ramsey believes these alerts are important to help you avoid minimum balance fees that many banks charge to customers if their balance drops below a certain level. 

Ramsey also warns about overdraft fees and insufficient funds fees, each of which you may be charged if you try to take more money out of your account than you have available. "Banks made over $11 billion on overdraft fees in 2019," he advised. "NSF fees cost about the same as overdraft fees, and they can happen with debit cards or checks." 

Account alerts that tell you when your balance is getting low could potentially help you avoid these costly added fees as well. 

Is Ramsey right?

Ramsey is right that overdraft fees, insufficient funds fees, and fees for falling below a minimum balance amount can be really costly. If you get stuck paying them, it's a huge problem for your finances. You get hit with these fees if you have too little money, and then the added costs the bank tacks on only makes your situation worse.

He's also correct that account alerts for a low balance are one way to try to avoid the extra penalty fees that come when you don't have enough in your account. But, the reality is, you can sign up for this type of alert using third-party apps if you happen to find a bank that doesn't make these kinds of alerts an option for you. So this shouldn't necessarily be a deal breaker if you like everything else the bank has on offer.

In many cases, you can also find banks that just don't charge you if your balance drops below a certain level, or even if you overdraft your account. Spending your effort looking for a bank that simply will not impose penalties on you at all is the most important thing you can do if you are worried about getting into trouble due to a low bank account balance. If you have the right bank, it won't punish you for struggling and ending up with too little cash in your account so at least your financial worries won't compound.

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