It can be easy to turn to your overdraft when you start to feel the effects of the financial crunch, but instead of turning straight to your current account you may want to instead think about a different account. This is because being overdrawn is not always the best option, not when you can end up in debt with incredible charges to block you from getting back out from underneath it.
When you have short-term cash flow problems the costly fees and interest rates make an overdraft an easy way to get cash but also an easy way to end up in debt. When you add in the extra costs of debt a simple purchase of groceries can end up to be 100 pounds more; which is not in your best long term interests for obvious reasons.
One of the things that you can do to avoid the high charges associated with being overdrawn simply includes looking around for the best overdraft deal. Many people believe that you cannot switch your bank account if you are overdrawn, but with a good credit history most banks will actually allow you to do so. So the trick is to trade for a better bank before you destroy your credit history.
For instance, larger banks such as Halifax and Santander charge you a daily fee on any account that is overdrawn therefore, if you spend an entire month overdrawn you will end up paying £30 in fines, even if you are only a few pounds overdrawn.
On the other hand, the First Direct 1st Account offers a £250 interest fee overdraft so if you were in the same situation you would end up paying nothing allowing you a little bit of leeway without penalties.