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 An
Overdraft from the bank is basically an agreement with the
bank to allow you to withdraw more money from your account
than you have in there.
Your overdraft is the amount that the bank will allow you
to take out as extra from your account, it is worth finding
out from your specific bank if you will incur a charge if
you use the overdraft facility or not, some will give you
a fee free overdraft, and others may make you pay interest
if you use an overdraft (as basically you are borrowing
money from the bank). Many banks will allow you a fee free
overdraft where you won't incur any penalty charges if you
make use of an overdraft. However, it is very important
to make sure you don't go over your overdraft limit
as it can be very costly. Some banks charge £25 per
day for 3 days if you go over your overdraft limit (even
by as little as £1), so make sure you are very careful
to not over spend.
One
bank that offers an automatic £500 fee free overdraft
is First
Direct, with this you are able to withdraw up to £500
without having any penalty charges!
If
you know you are going to go overdrawn it is worth contacting
the bank to check any charges, as it may be worth arranging
an overdraft even if you will only be overdrawn for a short
time. This is because an authorised overdraft is likely
to either be fee free or have far smaller fees attached
to it than an unauthorised one!
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