Dave Ramsey says to stay away from banks that don’t offer this feature

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Does your bank offer it?

Key Point

• There are many banks where you can open an account.
• Financial expert Dave Ramsey suggests finding a bank that provides important alerts when your balance is running low.

There are many things to consider when choosing a bank to open an account with. Clearly, the type of account offered is just as important as the account fee charged (if any).

However, in addition to these features, there is one important option that financial expert Dave Ramsey says you should check for offers from your bank. What is this and why Ramsay believes it is so important.

Don’t use your bank if it doesn’t offer this feature, says Ramsey

In providing tips on how to choose a bank, Ramsey advised to make sure your bank allows you to receive alerts when your account balance is low. He believes that having the option to set these alerts is so important that if your bank doesn’t offer it, you should run away.

“They don’t even give you a sporting chance of avoiding fees,” Ramsey said, referring to banks without this kind of account warning. “You can find a better bank than that.”

Ramsey believes these alerts will help avoid the minimum balance fees that many banks charge customers if their balance falls below a certain level.

Ramsey also warns about overdraft fees and insufficient funds fees. These can be charged when you try to withdraw more money from your account than is available. “Banks made more than $11 billion in overdraft fees in 2019,” he advised.

Account alerts that notify you when your balance is running low can also help you avoid these expensive surcharges.

Is Ramsey correct?

Ramsey is right that overdraft fees, insufficient funds fees and below minimum balance fees can be very expensive. If you have too little money, you will be hit with these fees, and the additional costs your bank will incur only make the situation worse.

He’s also right that one of the ways to avoid additional penalty charges if your account doesn’t have enough balance is low balance account alerts. But the reality is that if you find a bank that doesn’t make this kind of alert an option, you can use a third-party app to sign up for this kind of alert. If you like it, this is not necessarily a deal breaker.

In many cases, you can even find a bank that won’t charge you if your balance falls below a certain level or if you overdraft your account. If you’re worried about running out of money in your bank account, it’s most important to try to find a bank that doesn’t impose any penalties. If you have the right bank, you won’t be penalized for struggling and having too little cash in your account, so at least your financial worries won’t get worse.