Bank Overdrafts

Today’s Banking Scenario

In this modern time banking is an intricate matter. It’s not like what it used to be 10 or 20 years before. Changes happened after the introduction of online banking, debit cards etc. From bank what customers expect is to keep the money safe what they have earned and when there is need for money they should be able to withdraw it.

But all of us are well aware that things are not so easy in banking business. Banks are competing each other for making things easier for their customers. For this they have introduced many facilities like ATM’s, bank overdrafts facilities etc.

What Is A Bank Overdraft?

Bank overdrafts can set upper limits to one’s current account. Thus, with bank overdrafts one will be able to withdraw more money than in his current account. The limit will depend on the bank, the people you deal with, your credit history etc.

There are some advantages for bank overdrafts than bank loans. Bank overdrafts have the flexibility than bank loans. The amount can be changed accordingly for overdrafts compared to loans. The interest is only paid on the amount borrowed only. But there are certain minor disadvantages for the same too. Bank overdrafts cannot be used for borrowing large amounts when compared with bank loans. Rate of interest is also comparatively higher for bank overdrafts. The limits can be changed by banks as and when they require which gives an uncertainty element to bank overdrafts. But overall, bank overdrafts are wonderful instruments to get money for urgent needs.

Some Points To Look For, While Availing Bank Overdrafts

Bank overdrafts should be availed only after carefully reviewing the terms and conditions. These terms and conditions of bank overdrafts may tell you about lot of hidden charges while availing bank overdrafts.

Please do check your bank statements and then only you can find these charges. There are some ways you can avoid this. Given below are few tips that can be easily followed.

  1. You should start a research of this and keep checking your transactions
  2. You can always get help from the bank itself by calling their customer help line for clarification
  3. Ask politely to the executive to remove the charges, you should get their attention because they get calls every day and grab their attention to your matter first by good behavior.
  4. Always be patient, there is no use fighting with the executive at the end of the phone. Still if they don’t respond then you can respond showing little bit of irritation.
  5. Talk in a pleasing way to them and tell that this is your first charge so they may sometimes remove it.

Still if you have to pay this, it is best that you change your account to some other bank after researching and finding out a bank who do not levy such charges. There are banks which do not charge for over draft.

Anyway bank overdrafts are availed by a lot of people, especially businessmen to increase their cash flow. Thus, it helps to provide an economical growth to the entire society too.