4 wise tips when taking on an overdraft

We don’t always plan to use an overdraft. However, having one allows us to feel safe if anything unexpected should pop up. It can be a lifeline when things get tough and if you use it wisely, it can take the stress out of day-to-day life.

Here are four ways to wisely use the credit facility overdraft with Bank of Heritage Isle and how it can save you when you find yourself struggling with the bills from time to time.

1) Make sure you know your limits

Money Smart suggests that you give yourself an appropriate overdraft limit. Live within your means and the team at Bank of Heritage Isle’s Overdraft Credit Facility can help guide you to what an appropriate overdraft limit is. Obviously, the more you spend the more you need to pay back, so it is crucial that you talk to a professional about it.

2) Try and pay back your overdraft as soon as you can

Make sure that you understand the interest policy before going into an overdraft. Overdraft Credit Facility will only charge you interest on what you borrow, so knowing if you are incurring interest or not is easy.

3) If you use it correctly, it gives you a great understanding of credit.

According to Finance Management, having an overdraft will allow you to manage the flow of money going in and out of your account. Bills and automated expenses can consistently be paid without the fear that it will be declined. If you have a difficult financial week, it will be there to help you when you are in a pickle.

4) It is a quick fix and when used wisely, it won’t impact you in the long term

There are important do’s and don’ts when it comes to going into overdraft. The most important point to recognise is to know is that it doesn’t have to be used if it is not needed. It can be there as a Band-Aid, and it can heal any money worries in the interim.

Talk to the team at Bank of Heritage Isle and they can lead you in the right direction with overdrafts and the personalised limit that you need.