CINCINNATI, OH (FOX19) - Have you paid for that hotel or rental car for this summer's vacation yet? FOX19 is keeping your wallet and your bank account safe, with what you need to know about "batching" and how it could take a huge bite out of your checking account.
Batching is essentially a name for "holds" on your money. Many retailers send their charges all in one batch to the banks so they can get paid.
But even the most careful consumers could be hit with big-time overdraft fees if they're not careful. Every time you swipe your debit card, especially when buying gas, remember this.
"Many of the gas stations will only hold one dollar as a hold," said Britt Scearce, a credit guru and in charge of business development at Emery Federal Credit Union. "So therefore if you're going and checking your balance at the ATM machine your available balance is only going to show the one dollar's been held."
And that he said, could wind-up making your account overdrawn. Scearse said he hears horror stories every day from his clients, like at a gas station in Tri-County.
"Evidently this retailer was putting a 75-dollar hold on every single account regardless of how much money you or how much you were actually purchasing," he said.
The consumer spent maybe 20 bucks in gas. "The challenge there is now there's a 75 dollar hold on their account." And that, Scearce said, can last up to three days.
Scearse said we all need to keep a solid check register and have a spending plan.
"A lot of large banking institutions will charge you 38 dollars for every single one," Scearce said. "Plus 10 dollars a day that you're not getting it corrected and that can add up to a lot of money."
Document and know exactly what you've spent as you spend it and don't forget to keep track of automatic withdrawals like house payments, insurance payments and utilities.
"Well if they forget which days those are coming out and they're out there charging at the Starbucks, some people like to call 'em five bucks," he joked. "They're racking those up and they forget that this, say, 80 dollar payment is coming up."
And when paying for rental cars or hotels, he said only use cash or a credit card not connected to your checking account.
"But what they'll typically do is put a hold for maybe 4 or 5 hundred dollars in case you decide to use the mini bar, and not tell them or maybe you destroy the room," he said.
That is 4 or 5 hundred dollars more, than what you are paying for the room. Scearce said especially when on vacation, always use a regular credit card and not your debit card.
"Well that could be a real problem if you're using your actual debit card with your checking account because if you only had 5-hundred dollars in the account, you're thinking spend 2-hundred on the hotel room and 3-hundred to go to dinner and play, well you might not have that money available," he said.
And it is all absolutely legal. Also, don't forget those automatic drafts to your checking account and plan for them.
Scearse said he had a couple come in for counseling and they were spending 350 dollars a month and that was just on overdraft fees. He said if you can stop that, it'd be like having a part time job! That is found money!