Overdraft

Since April 2020, banks charge a single interest rate for overdraftsOverdrafts Explained: Costs, Rules and AlternativesHow UK overdrafts work: arranged and unarranged, how interest is charged, the effect on credit files, the risks and cheaper alternatives to borrowing.Read more → rather than fixed daily fees. Rates are often high, and the bank can withdraw or reduce the facility, so it is better for short-term use than a long-term loan.

Going over your limit can lead to refused payments. Heavy use may also concern lenders, for example when you apply for a mortgage.

You can check your credit reportsCredit reportA credit report is a record of your borrowing and repayment history, held by credit reference agencies and used by lenders to assess you.Read more → for free, and you should never need to pay for a credit scoreHow Credit Scores Work in the UKHow UK credit scores work: what the credit reference agencies record, what affects your score, why scores differ between agencies and what lenders actually see.Read more → or report.