7 Tips on How to Manage Your Overdraft

manage your overdraft Management of your overdraft puts you in control and allows you to avoid paying unnecessary interest and charges.

Overdraft Overview

An overdraft is a loan you arrange through your bank current account. It allows you to spend more money than you have in your current account up to an agreed limit, known as the ‘overdraft limit'.

Overdraft Fees & Charges

overdraft fees and charges

Overdraft Management Tips

  1. Have access to up-to-date information so that you can track the money going into and out of your account. Online banking will allow this.
  2. Understand the charges and fees which may be applied to your overdraft.
  3. Avoid paying by cheque as much as possible as you don’t know when the cheque will be presented for payment. This can make it difficult to budget and can increase the likelihood of breaching your overdraft limit.
  4. Use online payment facilities where possible – they are usually the cheapest method of payment.
  5. Use your overdraft for short-term borrowing and avoid remaining overdrawn month to month. Term loans are a cheaper source of long-term finance and as overdraft are not guaranteed banks can demand repayment at any time.
  6. Consider alternatives to using an overdraft e.g. cash injection, improve working capital management and other bank finance options.
  7. Ensure you are aware of the number of days your account needs to be in credit as some banks apply a further interest surcharge beyond your agreed interest rate.

What Questions Do You Have?

We are happy to help. Please post your comment below or contact our friendly and knowledgeable team on 01 677 9000.  To keep in touch, connect with us on Linkedin. If this article helped you, please share it with other businesses. Sources of information: www.moneyguideireland.com www.citizensinformation.ie www.consumerhelp.ie