What's my overdraft limit?
Your overdraft limit is how much you can spend after your balance reaches zero. For example, if you have an overdraft limit of £500, your balance can reach -£500.
Be aware that some bank accounts let you keep spending past your arranged overdraft limit.
Checking your bank overdraft
If you want to check your overdraft limit, just ask your bank. Or, you could sign into your online banking, or check the paperwork you got when you opened your bank account.
If you need to see how much you owe on your overdraft, you can check your balance online, in the branch, by phone or at an ATM.
Most banks also offer text message or email alerts to let you know when your balances goes below a certain point. This can help you keep track of when you're near your overdraft limit.
Can you always get a bank account with overdraft?
If you want a bank account with an overdraft facility, unfortunately it's not guaranteed that you'll be able to get one. There's no such thing as a guaranteed bank account with overdraft.
Every bank has its own set rules on who their overdrafts are suitable for.
When you've found the best bank for overdraft facilities, you can apply for the account you want. The bank will check your credit record and income and then decide whether to give it to you.
Although some bank accounts do have a guaranteed overdraft, not everyone will be accepted for those accounts.
Can you get bank accounts with free overdrafts?
Yes, some bank accounts offer a free overdraft.
This means you can borrow money through a fee free overdraft, with no interest, up to a certain limit.
If you stay within your limit, you won't be hit with any overdraft charges by banks with free overdraft facilities.
How much do banks' overdraft fees tend to be?
Most overdrafts aren't free. Banks' overdraft fees vary, so it's best to check the details with your bank.
When you're choosing a current account with overdraft facilities, you should try to find one with the best overdraft rates.
You might find it helpful to use an overdraft calculator to work out how much your overdraft is going to cost you. An overdraft interest calculator will show you how much interest you'll pay on your overdraft before you pay the money back.
Overdraft charges are taken from your bank account. If your balance was already £1,000 and you were charged £20, your new balance would be -£1,020.
Overdrafts for people with a poor credit score
If you want a bank account with overdraft for bad credit scorers, you'll probably struggle to find one.
Not many banks will give an overdraft to someone with poor credit history - a bad credit overdraft isn't common. Sadly - while you might be tempted to Google 'bank account with overdraft no credit check' - you'll discover that you always need a credit check to get an overdraft.
There are a few things you can do to help improve your chances of being accepted for a current account with overdraft facilities.
You could:
speak with the bank about your options
see if you could get accepted for a smaller overdraft limit
switch banks
try to improve your credit rating.
Don't forget to shop around, as every bank has different requirements.
You can read about bank accounts for bad credit here. But remember that in most cases, a bank account with overdraft for bad credit scorers isn't possible. Bank accounts with overdraft are usually for people with good credit history.
Switch bank accounts with an existing overdraft
If you're in your overdraft and you're being charged for it, switching to a different account could save you money.
Switching means you'll stop paying interest and other charges on your account. You'll also get months or years more to pay off the balance, without fees.
If you find the best bank account for overdraft facilities, you'll save the most money.
It's quick and easy to switch bank accounts. If your overdraft is big, you'll need to find the best current account with overdraft facilities and then make sure they'll allow a large overdraft.
Here's how to switch to another bank account
What happens if i can't pay my overdraft?
If you're having trouble paying back your overdraft, contact your bank account provider and explain your situation. Most banks will work with you to figure out a plan to pay off your debt.
If that doesn't work, you can try contacting one of the debt charities such as StepChange you offer a free service to help people become debt free.
