Basic Overdraft Question

csrivats

Hi all,
i ve just opened a Smile current account and it came with a £500 overdfrat facility.
Does this mean I can withdraw upto £500 without paying a penny as fee or interest?
Can you confirm as I can see the following on the letter from smile?

'with smile everyone gets a 12 month £500 overdraft with no fee. You'll just pay 9.9% EAR interest'

What does the 9.9% ear mean?

Thanks a lot

anniecave

The 9.9 EAR is interest. 9.9% per year. which would mean you would pay roughly £4.15 per month assuming you always have the full £500 overdraft all the time (which is obviously unrealistic, as assuming you'll be paying money in and out).

I don't use overdrafts anyway, I get banks to pay me interest for being in credit!