Natwest Overdraft charge?

talksr

Good evening, I have just got back from setting up my new Current Account plus at natwest.

I got a £400 overdraft with the account which could be a help on any bad months.

In the accompanying leaflets I have been given it says:
Overdraft limit: £400
Total Cost of Credit: £18.23
Please note that this amount is illustrative only and the actual cost to you will dpened on your use of the overdraft.

What does this mean? I have never had an account with an overdraft before. Does it mean, if I go into my overdraft there is a hefty fee?

rb10

You will pay interest for every day that you are in an arranged overdraft.

£18.23 is just an example - it should also say how large an overdraft that is based on.

It's generally a fairly small amount (although nicer to be avoided if possible!), provided you stay within the arranged limit. It's only if you go over the limit that you will be charged larger amounts.

Good luck with Natwest.

YorkshireBoy

talksr wrote: »

Does it mean, if I go into my overdraft there is a hefty fee?

Not a hefty fee, no. You'll simply pay interest at 19.89% EAR.

So, for example, if you max out your overdraft for an entire year it will cost you £400 x 19.89% = £79.56 or around 22p per day.

talksr

YorkshireBoy wrote: »

Not a hefty fee, no. You'll simply pay interest at 19.89% EAR.

So, for example, if you max out your overdraft for an entire year it will cost you £400 x 19.89% = £79.56 or around 22p per day.

Thanks to both of you.
I understand now. I doubt I would ever need the overdraft as I am careful with my money, but you never know.

Thanks again.
:T

chambta

The figure is what it would cost were you to be overdrawn to the maximum amount for three full months.

talksr

chambta wrote: »

The figure is what it would cost were you to be overdrawn to the maximum amount for three full months.

So £6 something a month.
Not too bad.

Thanks chambta