Understanding Overdrafts: What They Are and How to Prevent Them



Overdrafts can be a lifesaver when you’re short on cash, but they can also quickly become a financial burden if not managed properly.​ It’s important to understand what overdrafts are, how they work, and how to prevent them from happening in the first place.​ In this article, we will explore the ins and outs of overdrafts, and provide you with some valuable prevention tips.​

What is an Overdraft?​

An overdraft occurs when you spend more money than you have available in your bank account.​ Essentially, it allows you to continue making transactions even when your account balance reaches zero.​ Banks typically charge a fee for allowing overdrafts, either per transaction or as a daily fee.

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