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All about overdraft

by Rahul

Forget everything you think you know about overdraft

Overdraft is a constant victim of fake news. It is very common and easy to find reports, many without sources, referring negatively to the overdraft, which unfortunately occupied a bad space in people’s minds when this subject is mentioned. Although, you don’t have to fear the overdraft — in case of late payment, for example, you can apply for a loan to pay off the debt.

Before clarifying the lies told about the overdraft, it is necessary to understand what the overdraft is and who can use this type of service. Despite being a very popular subject, few people really know how to handle overdrafts, so there are many cases that believe that this type of service offered by the bank or financial institution is not beneficial.

In this article, we are going to talk more about special credit, answer all your doubts about this service, that it is a way to inform you and also give you more confidence if you want to apply to the bank and also to avoid false reports. So, shall we continue reading?

What is overdraft?

Overdraft is a service offered by banks and financial institutions to people who have an account. If you have an account, then it is very likely that this option exists for you. Special credit is like a loan, usually in small amounts, for those who want to pay debts or make a bank transfer, but, at the moment, have no money available in the account due to a negative balance. 

Have you ever wanted to buy a product or purchase a service or pay for something, but had no money at the moment? If you have a bank account, then the overdraft was there for you. Many people pay the overdraft on their credit card statement, so there’s nothing to worry about, it’s like a charge for a purchase.

Overdraft in the United States

If you’re an American, then you know that the rules for special credit can change depending on the state you live in. Even though special credit is a service offered by most US banks, states still remain independent, which means they have independent rules. If you are a foreigner and want to live in the United States, don’t be resistant to your country’s overdraft rules — the US is known for maintaining unique rules, study the case before traveling.

After using the overdraft

As discussed in the first topic, after using the overdraft, the charge will be made through the means you used the service. For example, if you bought something on your credit card using your overdraft, then the charge will be on your card statement. If you requested money directly from the bank, then you can choose between automatic debit, deduction of the money from your account or bank slip, which is a document that you use to pay the overdraft. There are no mysteries. 

Fake news

News about abusive interest on special credit or high debt is questionable, because special credit is usually offered in small amounts, larger amounts only on request, because the overdraft was created to be an easy solution for those who want to have quick money. If there are debts with the overdraft, then it was probably cumulative with other debts or other service requests. If you’ve never used an overdraft, give it a chance and get to know one of the most practical financial services.

In this article, we discussed overdraft — do you have any more questions about it? Then you can call your bank or financial institution and ask more about the amounts offered by the special credit and the payment methods. Understand that every case is different; if you know a bad case, that doesn’t mean yours has to be too.

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