3 Secrets to cutting your overdraft costs
BY READERS DIGEST
1st Jan 2015 Managing your Money
Overdrafts can come in handy, but it’s easy to get into the habit of using them to increase your spending each month, rather than as a last resort when you’re out of cash. Here are three tips to cutting the cost of your overdraft.
The danger with using your overdraft often is that you could easily be hit with hefty overdraft charges. The obvious solution is to avoid going overdrawn, but there are some other things to consider if you do need to use an overdraft.
1. Set up an authorised overdraft
Exceeding your limit, or going into the red when you don’t have an agreed overdraft, can be very costly. If you think it’s likely that you’ll exceed your limit, arrange for a higher limit or an extension.
You might be charged a fee, but it could be cheaper in the long run.
2. Switch banks
Switching your bank is pretty easy to do, and if you’re regularly going overdrawn you might be better off moving your account to a bank that offers an overdraft-friendly account with no fees or interest.
3. Use technology to keep track of your balance
Technology means it’s now easier than ever to keep an eye on the bottom line of your bank account. Phone, internet and mobile banking allow you to keep track of what’s in your account at any time of the day.
You might also be able to set up a text-message service that will alert you whenever your balance is getting close to zero
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