Banking newbie

kaydence

Hi all,

I just wanted to get some opinions.
I'm in the uk at present and I'm with a uk bank.
I honestly have never done anything more complicated than use an atm card or make a payment via debit card. I have never had a credit card and don't intend to anytime soon.

Basically the situation is that I'm between pay cheques at the moment.
I'm expecting another in two weeks.
I have been left in a tight spot regarding rent and I've noticed that there's a planned overdraft facility on my account.
I was thinking of upping the limit on my account.
Obviously it is a temporary fix that I want to pay off asap.

Can anyone explain how they work and how they're paid back to a complete beginner?
As I understand it will allow me to spend that amount for a specific time frame?
I'd appreciate anyone's experiences

Thanks

Priapus

kaydence wrote: »

I've noticed that there's a planned overdraft facility on my account.
I was thinking of upping the limit on my account.
Obviously it is a temporary fix that I want to pay off asap.

Can anyone explain how they work and how they're paid back to a complete beginner?

Best thing you could really do is go into your local branch and ask them to explain it to you, as Overdraft (OD) facilities may differ between banks.

If you think of it on a real simple level...OD facility allows you to spend more money than is currently in your account.

So if you have £100 in your account and you spend £150 on rent for instance. Your current account balance will be -£50. Next time your wages go in to your account this £50 will be deducted from your wages.

So if you earn £1,000 in wages, the net balance on your account will be £950 (£1,000 - £50). A small fee might be charged also, but for this info you'll need to talk to your bank.

Don't be intimidated because you are unfamiliar with these things. Talk to your local branch is the best idea.

Hope that helps a bit!

Noelisgod

and never breach your overdraft limit as the penalties are harsh