2013 Bank Fees – Bank Overdraft


"I warn you, Sir! The discourtesy of this...
“I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I — I withdraw my overdraft!” —- Cartoon from Punch Magazine Vol. 152, June 27, 1917 (Photo credit: Wikipedia)

2013 can be the year that you cut your Bank Fees or bank overdraft to a zero cost. But first of all you have to decide if this your best money option?  Lets look at the advantages and disadvantages.

Advantage 1   It’s quick and easy to arrange a bank overdraft. This can be done via your internet bank account, a telephone call or by calling into your local bank.

Disadvantage 1     Because an overdraft is such an easy way of getting a loan of sorts, it can also mean that you can easily go overdrawn through neglect. You would then incur heavy bank fees.

Advantage 2  –   If you only need a small amount of money to tie you over for a short period of time, this is an excellent option.  Added to this is the fact that some banks will even give you an interest free period.

Disadvantage 2  –   There may be hidden costs involved which could leave you with a heavy interest bill to pay.  You would really need to shop around to make sure you are getting the best bargain and even consider switching banks, for the bank with the the least amount of bank fees.

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Advantage 3  –   There would be no payment schedule, leaving you in control of the repayment of the overdraft for as and when you can afford to repay it.

Disadvantage 3  –   Running your account on a overdraft position can result in using your overdraft as a permanent status and as a result you never get to pay it back causing higher bank fees.

Advantage 4  –   The security of knowing that your direct debits will be paid for because of the bank overdraft facility.

Disadvantage 4  –   Not keeping abreast of your overdraft facility dates and perhaps missing a communication from your bank telling you that the overdraft will cease on a certain date, thus incurring late payments from your direct debit payees.

A bank overdraft would also be an advantage to anyone who wanted to clear a credit card debt and something to consider.

Banks will not generally allow an overdraft over a certain amount of money required, in which case you would need to apply for a bank loan.  It would be cheaper in the long run.  Either way, to keep your bank fees as low as possible, it is important to keep track of your overdraft facility and make sure that you do not step outside of the agreed amount.

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