Transferring and withdrawing money are two of the most common banking services used by people today. However, from time to time, issues may arise.
Online money transfer errors aren’t unusual. They range from using the wrong process to fees, time, and more.
One of the best ways to avoid issues when transferring money is to learn what they are and how to avoid them.
1. Using a Credit Card
If you open your online banking portal, you will likely notice three payment options for making an online money transfer. These include:
- Bank account
- Debit card
- Credit card
Try to avoid choosing the credit card option, regardless of if you plan to send money internationally or domestically.
A one-to-one payment process with a credit card charges about three percent of what you are sending: however, the cost of transferring funds with a debit card is typically free.
Keep in mind that this isn’t always the case. Popular money transfer services, such as Western Union and MoneyGram, don’t charge you extra if you use a credit card.
While this is true, your credit card issuer may still apply an additional fee.
This means that you must pay the cash advance fee assessed by the bank (or credit card provider) and pay higher interest on the amount. This adds up.
To avoid these additional fees, don’t use a credit card.
2. Not Searching for the Best Exchange Rate
If you plan to send money abroad, an important first step is checking the exchange rate with your bank or looking for it online. Once you know this, you can begin the process, right?
Unfortunately, this is not lways the case. Even though currency values are the same across the globe, this does not apply to exchange rates.
Banks and different providers set unique exchange rates. Many may add margins to the exchange rate that works in their favor.
While this may not be apparent when checking the rates, it may incur additional costs when making a transfer.
To ensure you know the rate, check it using several sources. It will only take a few extra minutes and help you figure out if you are getting the best one available.
3. Account Details
You may think this mistake would never happen to you. While it may seem obvious that you need to check the account details, this remains one of the most common mistakes made when transferring money.
You must get the details of the account right.
Be sure to double-check the details before confirming the online transfer or transactions. Just adding one extra zero can be a costly mistake.
Also, if you accidentally input the wrong account number for the recipient, it may transfer the funds to a random account.
In some situations, these small mistakes can’t be fixed because there is no simple refund process when transferring money. If you transfer funds to the wrong account, you must contact the account owner to see if they will return the funds.
If the other party has not received the money yet, and you figure out you made a mistake, you can cancel the transfer you attempted to make. However, this option is only available with some money transfer services.
The best way to avoid this mistake and issue is to ensure that everything you enter is correct.
4. Not Considering Transfer Timing
When you send money online, it arrives at the recipient faster than other methods. You must consider a few things before you “confirm” your transfer, though.
This is particularly important if the payment has a deadline.
Are you making the transfer on or around a holiday? What about in the country where you plan to send the funds?
Holidays occur in all countries, and if one is going on when you transfer funds, it could delay the process.
Chances are your money transfer must go through some type of financial institution, which means bank holidays may add to the processing time.
Expected Transfer Date
Before confirming your transfer, you will get information about when the money will likely be sent. Be sure you look at this and confirm it works with your timeline and needs.
When paying for a money transfer, make sure you understand that not all payment methods are created equal. While ACH payments help you save on bank service fees, the payments usually take longer to process than bank or card payments.
5. Using a Savings Account
Some people opt to use their savings account instead of their checking account when funding their transfer.
You should note that a savings account only allows six withdrawals or transfers per month if you do this. While this can vary based on your financial institution, it is the “general standard.”
If you exceed your allowed transfers, you are charged for each additional one you make.
Understanding Common Online Money Transfer Errors
As you can see from the information here, several online money transfer errors can occur. Knowing what these are is the first step in avoiding them.
Be sure you know the transfer details before making it and that you use an account that will minimize the fees you are charged. Doing this will provide you with the most affordable money transfer.
If you are searching for more helpful tips, resources, and information, be sure to check out some of our other blogs. We update the information regularly to help keep you informed.