It is almost impossible to imagine a person who does not use plastic cards. Nevertheless, many of the nuances in handling cards are still not known to everyone. For example, overdraft raises many questions.
Instructions
Step 1
Storing money not in a wallet, but in a bank account has become as commonplace as using mobile communications or e-mail. Now almost no one confuses debit plastic cards with credit cards, although at the time of their appearance, many were convinced that any plastic card is a "credit card". In fact, it can become credit only if the bank has entered into an agreement with you that provides you with a so-called overdraft, that is, the ability to perform operations on the card with a zero or negative balance.
Step 2
Overdraft is a type of short-term loan with some differences from the usual loan products. The amount of the overdraft is set by the bank individually, based on your solvency. Most often, an overdraft is provided to holders of salary cards, since in this case the bank can be sure of the timely and stable receipt of funds to the account. The overdraft limit rarely exceeds two cardholder's salaries.
Step 3
The second difference between an overdraft and a regular loan is low or zero interest rates for a certain period of time. In addition, you do not need to make a request for a loan and wait for a decision on it - if the overdraft is approved for you once, then you can use it until the end of the contract. Unfortunately, there is one unpleasant point when compared to traditional loan products. It lies in the fact that if a regular loan can be paid in installments over the term, then all the funds coming to your card will go to repay the overdraft, that is, in order to repay the overdraft, you need to deposit an amount equal to it on the card. Thus, if you reach the limit, you will not be able to withdraw money from the card until the debt is fully repaid, and all income will go to this. In addition, the maturity of an overdraft is usually significantly shorter than in the case of a standard loan. On the other hand, overdraft is a great opportunity to borrow up to paycheck without burdening your acquaintances.
