Overdrafts

An overdraft is a way of borrowing on your bank account. Overdrafts are given on your current account so that when your balance is 0 in your account you can still spend up to a certain limit. It is suitable if you have short-term cash problems and for spreading out the costs of expensive events such as Christmas or holidays. Generally the APR on an overdraft is between 8% and 12% and there are other fees associated with overdrafts. Be sure to pay off overdrafts within specific time frames as the costs add up they also have a habit of becoming permanent.