Can someone please explain overdraft charges to me?

Question

I recently checked my statement online and found that the bank has charged me £30 for the first time since i opened the account. I know i sound quite simple but i don't understand what they're charging me for. Is it maintenance etc? Help .........

Answer 1

You will have money flowing into and out of your bank account.  Your main goal is to always make sure that you absolutely have enuf money "in" the account to cover any money going "out" of the account.  You can't guess.  You can't hope for the best.  If you deposit $100 into your account, it may not be available for you to spend for up to 10 days.  The banks are given protection by law to hold onto your money as long as they need.  So you can't deposit $100 at 9am Monday and write a check at 5pm on Wednesday on that money.  If the $100 is not officially "verified" as cleared into your account,  you don't have it to spend.  If you do try to spend it, you will be charged a fee.  Banks make a huge amount of money on fees.  And many people wonder if the banks aren't purposefully "slow" in crediting your deposits so they can earn more fees.

It is a good idea for you to contest this overdraft fee if you see that you did think you had money in the account.  The banks can really verify the $100 deposit in 1 hour nowadays,  no need to take the 10 days.  I don't think you should have to pay the fee for your first mistake.  Can you make sure it doesn't happen again.

Answer 2

It's kind of like they're punishing you or something so you will learn not to let your account go negative. If you write a check for more money than what's in your account they will charge you a fee. I work at a bank and we have overdraft protection. Go to your bank and ask if you are elligible for this. That way if you ever go over your amount the bank will cover it up to whatever amount of money they allow you to have. With this, your bad checks will not be returned. The bank will cover them, but you'll still be charged if you ever have to use it. It's just an emergency if you really need it kind of thing.

Answer 3

http://en.wikipedia.org/wiki/Unauthorise...

Answer 4

That means you spent more money than what you had available in your bank account.  If you have a balance of £300 and spend £315 you will be charged an overdraft fee.  If this is your first time you can call the bank and have it removed.