It's easier -- and potentially costlier -- than ever to bounce a payment By Brian J. O'Connor Detroit News Finance Editor It's not all that hard to check your bank balance. It's just that automatic deposits and debits, ATM transactions, debit card purchases and the ebb and flow of whatever paper checks you've written make it so much easier to completely lose track of how much money is in your account. Just ask Rep. John Conyers of Detroit. The chairman of the House Judiciary Committee admitted last week that his driver's license was suspended after he wrote a bad check at renewal time. In his case, the check was from an account that was closed. A written statement from the congressman's office said the mistake was inadvertent, and for most of us it is. But about 93 percent of $1.97 billion in overdraft fees during 2006 came from just 14 percent of U.S. checking account customers, according to the FDIC. Some were just chronically careless, over-drafting at least five times a year, but in other cases the overdrafts were intentional -- a do-it-yourself temporary loan until payday. 'Overdrawing your account is the financial equivalent of not being able to walk and chew gum at the same time,' says Greg McBride, senior financial analyst at Bankrate.com. 'Anybody can overdraft once in a while, but sloppy habits are a one-way ticket to the poorhouse.' In a 2009 study of checking accounts, Bankrate.com found that bounced check charges had sprung to a new record -- an average of $29.58 for the first one. Many have tiered fees, charging an average of $33.88 for the second through fourth check in a rolling 12-month period. For a fifth check, the average jumps to a whopping $36.19 per check. That's just bank fees. If you don't cover the overdraft in a day or so, some banks start charging interest if they paid the check for you, through their 'courtesy overdraft' policies. If the check was returned to the depositor for insufficient funds -- or NSF in banker-speak -- you can get hit with the bank fee plus a service charge from the merchant or party that tried to cash your rubber check. If you don't make good on the check within 30 days, Michigan law allows that party come after you for double the value of the check or $50, whichever is greater, in small claims or district court. Don't look for relief from new banking laws that kicked in this year on electronic overdrafts. Those rules were limited to one-time debit card purchases and ATM withdrawals. Whatever your bank's policy was on paper checks and automated debits didn't change. Usually, that's the notorious courtesy overdraft protections ?' the most expensive option banks offer, with charges up to $35 per check. 'It doesn't relieve you from having to monitor your balance,' McBride says. 'If your debit card purchase of a sandwich at Subway would overdraft, then the check you wrote yesterday probably is going to overdraw your account, too.' The answer is to track your balance, including using the nifty new tools of technology and, in the event you do make a mistake, put the least expensive check protection in place. Balance monitoring: Thanks to online banking, you can check your balance any time of day or night, so do that once in while, especially in the last few days before payday when things get tight. Don't forget to record paper checks ?' they aren?'t deducted from your available balance until they've been cashed. Another option is to set up account alerts to warn you by e-mail or text message if your balance falls below a certain limit. Smart phone users can see if their bank has a mobile app to check balances by phone or other mobile gizmo. Account linking: By far, the cheapest option when you need to cover a check is to link your checking account to another account at your bank, typically a savings account. Fees for this service typically are $10 or less, McBride says, and banks often will charge that fee only once, to cover your balance at the end of the day, not on each individual item. If you don't have a separate savings account, consider opening one and moving some money from an emergency fund or other long-term account to cover the occasional checking slip-up. Instant loans: This option usually ties your overdrafts to either a line of credit or home equity line from the bank, or a separate bank issued credit card. Interest fees apply, and you may have an annual fee or other charges as well. And you don't want to let the balance pile up and turn into continuous debt payment. The worst option: As mentioned above, the default 'courtesy overdraft' many banks have applied may still be the default on your account. It's not only expensive, but it also gets applied to every overdraft on your account, often with no daily limit. In fact, most banks have actively managed your account to create the maximum number of overdrafts by rigging the order of cleared items from largest to smallest amounts, a trick called ?check ordering.' New FDIC rules would ban that odious and unfair practice, but haven't been finalized yet. Don't wait for the FDIC -- protect your account now, by setting up a system to monitor your balance and, if you overlook something, pick the cheapest bounced check backstop your bank offers. And if you close an account, like Conyers, don't forget to shred or burn your unused checks. 'Overdrawing your account is a mistake that anybody can make once,' says McBride. 'But at 30 bucks a pop, it's a painful reminder to keep closer tabs on your available balance.' boconnordetnews.com (313) 222-2145 