Aaaaaaaaaaaaaarrggggh, Overdrafts...Some Help and Advice Definition.
Overdraft = short term cash, long term expensive pay back...!! An overdraft may sound great, but don't forget that although it means short term cash to even get close to getting one, you have to negotiate extensively with the bank manager, and if you are under 18 you are very unlikely to get one, and if you are under 16 forget it!. The main reasons for this is because the overdraft needs to be paid back, and the bank is extremely unlikely to give a loan (which is basically what an overdraft is) unless you have a regular income, and people under 18 usually don't!  You've spent too much on prezzies for your mum on mother's day again (as you do), and after some quick maths you realise that you've spent money you don't have in your account. While it's nice to do this, it also costs you dearly if you don't pay it back quick. And there's no way of getting out of it. Boo...
Some banks will let you go overdrawn for a few days free of charge, but not regularly, and they will start charging fairly soon. Make sure you know the specific details of being overdrawn on your particular account before you go out spending with your shiny new plastic friend. Bear in mind also that some banks won't tell you outright that you can go overdrawn, and seeing the interest charges on your next statement can be quite frightening if you do. You can get an authorised overdraft. This is where you go in and agree with the bank a limited overdraft. You need to arrange an interview at the bank for this which they may charge you for. Check this out first because there may be arrangement fees, interest charges and even fees for drawing cheques while overdrawn. This needs some very careful thinking through - ask yourself if you need the hassle. What you can’t do is just go overdrawn and try to ignore it. Go overdrawn without the bank's say so and you will pay for it biiiiig. What’s more they may refuse to honour your cheque or cancel your plastic, without telling you, and that can be very embarrassing. Remember all the films where people have their cards cut up in front of them, much to their mistresses disgust? (oh... maybe it's just the films i watch then ;p) So the advice is: if you get into trouble, contact your bank. They are there to listen and advise. Talk things over with them, and listen to what they have to say. Then act on it. Better still BE IN CONTROL: don't go overdrawn; manage your money. Remember: one of the main reasons for running out of cash is not keeping an accurate check on your balance. You can get this anytime from a cash machine (ATM) or from inside your bank or building society. So keep a count of what you spend - check the balance regularly (online banking can be useful for doing this as it means you can do it from home, or near a computer) Another important point is that when paying money into your account, it takes 2/3 days for cheques and other payments to clear; so if you pay it in today you can’t draw on it for a while. So leave some money in the bag! Read:
- Kieren
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