Overdrafts

[Goat]

Ive never had 1, I think my bank says I can have £1,500, im not gonna use all that, but how does it work?

Current Account
All customers Any amount 1.50% a month (19.5% EAR)

Thems the figures, I presume they wont charge me for having the overdraft, so lets says I use £500 of it, will they charge me

£7.50 a month for having it, presuming it doesnt change in size?

Or am I way off?

 

[Hayee]

They only charge you for what you use. Also, even though you're allowed 1500 you can choose a lesser amount!

 

[Goat]

Yeah I know, but Christmas is coming.

 

[Hayee]

If you pay it off within the month you don't pay interest

 

[bluebastardo]

Ive never had 1, I think my bank says I can have £1,500, im not gonna use all that, but how does it work?

Current Account
All customers Any amount 1.50% a month (19.5% EAR)

Thems the figures, I presume they wont charge me for having the overdraft, so lets says I use £500 of it, will they charge me

£7.50 a month for having it, presuming it doesnt change in size?

Or am I way off?

HSBC Example.

Overdrafts are now arranged by the bank doing a credit check on you, if you apply over the phone, or not.
Each month, you will be charged interest at the end of the month, and if you go over your overdraft, you will be charged on average about £25.
A thousand pound overdraft that is used up to the limit generally incurs an interest charge of about £14.50 per month.

There is also normally a charge to set up the overdraft, and the overdraft lasts for a period of time. The same charge may be applied each time it's life span is renewed, unless you get your bank to waiver it.

Hope you find this helpful.

 

[Lao]

If you pay it off within the month you don't pay interest

You probably do. Interest will be charged on a daily basis for whatever amount you have used. Plus maybe a one off arrangement fee.

Credit cards are usually interest free for the first month.

 

[McBain]

Dont do it.

Credit = Bad