An overdraft is a type of credit that allows you to withdraw more money from your account than you have deposited. This can be useful if you need to make a payment but do not have enough money in your account at the time. However, overdrafts can be expensive, and you should only use them if you are sure you can afford to repay the money you have borrowed.
When you have an overdraft, your bank or building society agrees to lend you a set amount of money. This is called your 'overdraft limit'. You can use this money whenever you need to, up to your limit. For example, if your overdraft limit is £500 and you have £50 in your account, you can still spend up to £500.
If you go over your overdraft limit, you will usually be charged fees. These can be high, so it's important to make sure you stay within your limit.
Overdrafts can be useful if you need to make a payment but do not have enough money in your account at the time. They can also help you to avoid being charged fees for things like bounced payments.
Overdrafts can be expensive, and you should only use them if you are sure you can afford to repay the money you have borrowed. Fees for going over your overdraft limit can be high, so it's important to make sure you stay within your limit.
There are a few ways you can avoid being charged for an overdraft:
If you go over your overdraft limit, you will usually be charged fees. These can be high, so it's important to make sure you stay within your limit.
There are a few ways you can get out of your overdraft:
Overdrafts can be expensive, and you should only use them if you are sure you can afford to repay the money you have borrowed. You should also make sure you are aware of the fees charged for going over your overdraft limit.
There are a few things you should compare when you are looking at different overdrafts: