Every day more and more people, without even realizing it, use the overdraft service. This service implies either a one-time fee or a short-term small loan. How does this happen? How can I get such a loan without knowing it? Everything is very simple. You write a check or make a purchase using a bank card, but you do not have enough funds in your account. The reason for this situation, usually one – the carelessness of the account holder, it is very rare when a technical error occurs on the side of the bank. Most often, you will be denied a transaction, but it also happens that a negative balance is formed on the account. So you have issued a service overdraft. It even happens that you have time to make several purchases until you know the whole truth.
When it comes to overdraft fees, not all banks are the same. Many banks leave debts on their current account, which undoubtedly minimizes your future expenses. It will be a little worse if the amount of the payment for it is added to the amount of debt and then you have to admit that they owe the bank more than they spent. And the worst option is to charge additional interest on your new loan. In rare cases, it is possible to refuse to pay for an overdraft, but having typed a few, you can not count on it.
Why do banks charge overdraft fees?
There is a fairly reasonable answer to this question. Banks do not always want their customers to fall into overdraft, so they try to make it as expensive and not very convenient. At the same time, if the service is very expensive or too uncomfortable – you will think about changing the bank. Banks cannot refuse this service at all either, so they may lose some of their clients.
In this overdraft means that you used the money of the bank, that you owe him. Accordingly, the bank has some risks, because there is always a moment that you overspend your accounts and not return the money back, or return them with a long delay.
Does every bank have an overdraft service?
Not all banks provide this service. Some banks are more than reasonable approach to the issue of overdraft. They may offer you a loan for an overspending amount, but with a really small percentage. If you went to a minus on a credit card, then the percentage will be less than the principal.
There are banks that do not provide overdraft service at all. But this may not be the best option for the client, and in rare cases is not at all appropriate. So, some banks will not allow you to go into a minus on a credit card, but at the same time they will impose a penalty on you for an “extra” transaction. And besides shame at the checkout, you will also have another unpleasant collection.
There is also an opportunity to open a separate account from which money will be withdrawn in case you have reached an overdraft. But most often, banks charge a fee for such an opportunity. And the number of such transactions, as a rule, is limited.
Be attentive to your accounts and finances in general
If you keep track of your home money, keep track of your bank accounts and credit cards. Do not rely for sure on SMS notifications, there may always be technical failures. Check your balance and give a report to yourself, how much you spend, and how much money you have.