What is an overdraft when talking about finance/credit?

Answer 1

it's like additional money you have in your account that you can use if need be
you have overdraft fees though if you go below
your balance and have to use this overdraft

Answer 2

Overdraft is a loan given against your checking account. What the banks do is find out your monthly income and give you about fifty per cent of that income with a promise that you will deposite tha pay checks in that account. Of course they charge a very high interest rate.

In practise what happens is that they will allow you to write checks from your account even though the balance is zero and will honor those checks. They will allow your account go negative up to the amount that they agreed to give you. They will recover their money and the interest when you deposite your pay checks.

Answer 3

Overdraft is spending more money than you have in your account. If you have a checking account, you can get overdraft protection. That is a loan that will cover any check that comes through and you don't have enough money in your account to cover it.
The bank will charge you for using this overdraft protection...but it's better than bouncing a check.

Answer 4

That means you went over your limit. I do believe. Sometimes when that happens, you really need to pay your bank a personal visit. Or give your card company a "Jingle". Because, a Dominoe effect could be next. And that's not good. Actually, that's with checking. I'm not sure with a credit card. Except borrow from family or friends if you have too, and send in a little extra to your credit company. So, that it doesn't create worse problems. And, if I were you, I wouldn't procrastinate about this matter. Get it taken care of A.S.A.P.!!!!! Good-Luck!

Answer 5

It is when you your credit card or debit allows you to withdraw from you account but your account does has the amount you withdraw.It does stop you from withdrawing it because the amount isn't there.The hit you with a overdraft fee for letting you have that money. So try not to go over the amount you have because it can leave you in a big hole.

Answer 6

Bouncing a check; that is, not having enough money in your checking account to cover all the checks you write. You attempt to "draft" more out of your account than you have in the account. or .... in other words, "overdraft. " :)

Answer 7

when you make a draft from your account and you do not have enough funds to cover the draft, penalties usually apply

Answer 8

Either you exceeded your limit, or did not send your payment on time.