Overdraft fee
Cards & borrowingA charge for using an overdraft or going over an agreed limit.
Overview
Fees can apply to arranged or unarranged overdrafts depending on the bank.
Costs can add up if balances stay overdrawn.
Why it matters
- Fees increase the cost of borrowing.
- High overdraft use can affect affordability checks.
- It can signal financial strain to lenders.
FAQs
Do all banks charge overdraft fees?
Fee structures vary, but most charge interest or fees for overdrafts.
Can overdraft fees affect my credit score?
Fees themselves do not, but missed repayments can affect your score.
Related terms
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