When using an overdraft, would I get charged if...

MrTomato

...I used my overdraft to send money and then paid it back on the same day?

So will this work, or will interest be applied purely for making use of the overdraft. The overdraft is an arranged/agreed/formal one from smile, so there is no fee for using it.

Or will I get charged one days worth of interest? Monthly interest would be about 1.34%, so surely it won't be high.

jonesMUFCforever

Banks will work on your balance as at close of business every working day - if you are overdrawn you will pay one day's interest - I agree it will not be much.

MrTomato

hmm.
I'm considering applying for the Halifax reward account and using my £500 overdraft twice a month to get the £1000 paying in amount.

So if they both accept and send faster payments, I could do it all in a day without interest if I get the money back to smile?

Presuming Halifax don't require you to keep the money in for 24 hours or more, but I'll read the T&Cs now.

HappyMJ

Can you do the transfers on pay day? I do mine on the day I'm paid my JSA and my HB... If you don't get paid £1000 per month then do it several times during the day or the next day so you don't actually use any overdraft.

MrTomato

HappyMJ wrote: »

Can you do the transfers on pay day? I do mine on the day I'm paid my JSA and my HB... If you don't get paid £1000 per month then do it several times during the day or the next day so you don't actually use any overdraft.

Yeah, I could, but that'd be 3 payments and not 2, and I'm a lazy !!!!!!! like that:p hence why I'm paid under £500 per month as I only do 12 hours a week.

Do you know if you get the decision straight after the application, or do you need to wait for the post to find out?

Olipro

if you make a payment tomorrow morning and say it puts you £300 overdrawn and you then go into a branch later in the day and pay in £300 cash (using a teller, a machine is no good unless it credits you immediately) then you will not incur an overdraft charge

blueberrypie

jonesMUFCforever wrote: »

Banks will work on your balance as at close of business every working day - if you are overdrawn you will pay one day's interest - I agree it will not be much.

It depends on the bank - some still require funds to be in the account at the close of business on the day *prior* to a payment going out, and will charge if they're not.

sscott5581

MrTomato wrote: »

hmm.
I'm considering applying for the Halifax reward account and using my £500 overdraft twice a month to get the £1000 paying in amount.

So if they both accept and send faster payments, I could do it all in a day without interest if I get the money back to smile?

Presuming Halifax don't require you to keep the money in for 24 hours or more, but I'll read the T&Cs now.

Halifax dont require you to keep the money in for 24 hours so your plan would work.