Overdraft Debts
Overdrafts are a very common and simple form of debt. The bank extends the amount of money that you can access, beyond the actual money in your account. Many banks will do this for their customers without having to pass an application, but overdraft debt is serious and can be expensive, particularly if it is unauthorised. When getting or extending an overdraft and going deeper into debt, it is the responsibility of the consumer to understand the fees and interest rates that apply.
Going over your overdraft limit
Going over your overdraft limit usually triggers a penalty charge. The bank will charge you a fixed fee, and then charge further direct debits or cheques that are automatically taken or put through by you. Furthermore, the bank may also freeze the account.
Overdraft fees
Overdraft debt can get more serious if fees and charges are applied. Many banks incorporate a fee for running and overdraft facility.
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