Your credit record has a big say in your financial wellbeing. Whether you’re applying to buy a home or a new car – it’s important to financial services providers that you manage your finances responsibly. We would like to make life a little simpler when the going gets tough. If what’s coming into your account is not enough to cover what’s going out, an overdraft can provide a flexible source of additional funds to cover those unplanned expenses. You can also save on interest costs since you only pay interest on the amount you used.
According to Thembani Mohale, Head of Overdraft Product for Retail Markets at Absa, it’s critical to protect your credit record. Should your debit orders bounce, your credit record gets negatively affected. This, in turn, will affect your ability to access more finance in the future. An overdraft is a good safety net that allows your debit orders and other transactions to be honoured once you have exceeded your funds, helping you meet your short-term cash needs, avoid penalty fees and keep a clean credit record. Customers are charged a bespoke interest rate that is based on their risk profile and is linked to the prime rate.
Mohale also encourages you to spend your money responsibly. There are extraordinary circumstances where your monthly expenses might peak, but you should be aware of how much money is in your account at all times. Regularly checking your SMS notifications and balances on your Absa banking app, or online banking will help you to stay in control of how you spend your money.
Here’s how you qualify and apply for an overdraft:
Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.