Overdraft is a widely used feature for consumers to keep their accounts fresh and balance their finances. However, would this be a good financial control option?
The following is some information about this type of check and what are the interest rates charged
This type of check is a contract that is established between a financial institution and the account holder. Thus, a value is arranged in the current account in order to be used and subsequently returned to that has all additions linked to the transaction type. Anyone who has an account and fits what the institution requires as a profile can use this type of product.
The overdraft function
Therefore, consists of a value that is “added” to your actual bank balance. For example: your account balance is $ 1,000.00 and your check limit is $ 300.00 and thus the balance to drive that will be available will be $ 1,300.00. In this case, for your financial control, it is extremely important to be careful, because many institutions have added the two balances on your statement, which appears to be only the value of the actual balance. Therefore, all caution is necessary in the analysis of a bank statement so that there are no unpleasant surprises at the end of the period.
Thus, another danger that the user of this type of check runs is precisely the incidence of very high interest rates. Instead of a installment as in a traditional loan, the value of the check is charged in only one installment, with the addition of all fees charged by the institution. Thus, the agility in authorizing this type of service may lead the consumer to think that it is easy money. However, as we know, in the financial market things are not so simple and there are always complex rules that involve your transactions.
So if unavoidable resort to this type of service
Make a thorough research of each of the banks in the market, because high rates can vary between 10.1% and 1.48% per month. We suggest caution in your relationship with these transactions.
What do you think of our tips on this type of check and the relationship with your financial control? Think about it, because bank interest rates are too high and can lead to indebtedness. And that’s serious business.