Dipping into your overdraft – is it a case of “oops, I did it again”? Overdrafts are one of the most expensive ways to borrow, so here’s why it’s not the best idea to OD on your OD…
If you’ve got a decent credit score, you might be able to switch to a bank account with a cheaper overdraft. Some banks like First Direct and Nationwide even offer free overdrafts but not everyone will get those, so another option might be a 0% money transfer card.
This is where you can pay a one-off fee of about 3-4% to get some cash paid directly into your bank account to clear your overdraft. Then the amount you owe is put on this card but at 0% so it’s a chance to pay off what you owe, usually over 18 months.
But to be honest, some people might just be able to find savings in their everyday spending and put that money towards paying down the overdraft every month.
That would be a very sensible idea considering how high overdraft charges are!