If you go over your overdraft limit, the bank is probably going to charge you. Here is what’s likely to happen:
Un-agreed borrowing on your overdraft, which is known as unauthorised borrowing, is painfully expensive. It can cost anything from fifty pence a day up to ten pounds a day.
You could also be charged interest and monthly fees, which can be as much as thirty pounds.
Fees on every transaction
On top of that, banks will charge you a fee for every transaction that takes you further into the red and some of these can be as high as twenty five pounds.
What should you do?
If you do get stung with unauthorised overdraft fees and it was a genuine mistake or it’s the first time it’s happened, it’s always worth calling your bank to see if it will refund them.
Get a bigger overdraft limit
If your overdraft limit is too small for you, call your bank and see if it will agree to increase the limit to a realistic level.
Know your balance
Many banks will send you a text alert if you’re nearing the end of your agreed overdraft, so sign up if they offer the service. Otherwise an online banking app is a great way to keep track of where you are.
Switch to a new bank
Finally, if you don’t feel your bank is working for you, switch current account and take your overdraft with you. Whether your new bank agrees to your overdraft, and how much you get, will depend on how well you’ve managed your money in the past.