When opening a bank account, it is common for people not to read the contract with those “lowercase letters” and do not worry about the interest rates that will eventually be charged by the bank …
Most of the time this is because we believe we will never need to use credit services like the “overdraft”, whose interest rate is one of the heaviest in our pockets!
The “special check”, or special limit, is already available at the moment the financial service contractor opens his account with a bank and this amount can increase over the years, being established according to the financial client.
The thing that surprises most people is the high interest rate of the loan on this type of credit. That is why many people end up being debtors on the Credit Protection Service .
What, after all, is the overdraft?
This is a service that banks offer as a “safe mode” so that the client has money at his disposal if he needs some financial urgency and has his account ZERO at that specific time.
Moving from the stipulated limit to your account, the client must use the money made available by the financial institution, entering the special limit. It is, therefore, another modality “masked” of credit or loan!
However, unlike other types of loans, this is automatic, without requiring the person to go to the bank to hire a special plan. All banks obviously apply an interest rate on that loan that is subsequently charged, along with the pre-approved loan amount. That is where danger lies!
Why is the overdraft so used?
Well, the truth is that unforeseen events always happen, even with the most cautious … Spending beyond budgeting may actually be necessary in different life situations, such as in a health emergency, to pay debts and other badly planned maintenance or unexpected. In these cases, the convenience of using this service can not be denied.
In Brazil, only in the last year, about 24 million people used the overdraft. Can you believe?! The problem is in the lack of consideration, or lack of knowledge, of the interest rate applied. Approximately 80% of people who use the so-called “revolving credit” do not know details about the fees, believing that they will only pay the amount they used when the bank charges the debt …
How to calculate the interest rate
When your account remains with the negative balance, after a certain period of time – which varies from bank to bank – the daily interest on debt begins rolling. To calculate how much you pay interest, in case of debt by the use of the limit, you must follow the following steps:
- First, know the monthly “special limit” rate of your bank;
- Divide this rate by the number of days of the month;
- Know the amount of days that used the loan money;
- Multiply the above result by the amount of credit used.
Beware of rates
Some banks charge an additional fee when you use the overdraft. This fixed rate can be much higher than the interest amount, so be smart! When choosing a bank to open an account, you should research your interest rates but also the rates and additional fees for the services you offer and, especially, read the agreement very carefully and ask your questions before becoming a bank. client…
The best way to avoid having problems with bank debt (and not risk entering the SPC) is to practice a good financial education. The problem is to use limit money constantly for the payment of bills that are not urgent or emergency. It is possible, in most cases, to have another much more attractive line of credit, such as the Jabberwock online loan. Interest rates are lower than most banks’ overdrafts and have no hidden fees!