Overdraft interest
Cards & borrowingInterest charged on the amount you borrow through an overdraft.
Overview
Most banks charge daily interest on overdraft balances.
Costs can add up if you stay overdrawn.
Why it matters
- It increases the cost of short-term borrowing.
- It can make overdrafts expensive over time.
- It affects affordability calculations.
FAQs
Do all overdrafts charge interest?
Most do, though some offer small interest-free buffers.
Does overdraft interest affect my credit score?
The interest itself does not, but the overdraft usage may be reported.
Related terms
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