Overdrafts and negative balances: What's allowed?
in Banking, Insurance & Loans ·
Hey, can someone walk me through this? If I have an approved overdraft on my checking account for $2000, let’s say I actually used that $2000 for about 6 months. And the interest rate is sitting at 8.5%.
So, what's the actual damage? How much are they taking from me?
My math says 6000 x 0.085 = $170, is that really it? Does it not matter how many months I was actually in the red?
I don't really get how this works.😵
Second thing: does the bank just hit me with one big lump sum for the interest at the end of the year, regardless of when I was overdrawn?
Or do they split that amount up into 12 chunks and just shave it off every month?
So, what's the actual damage? How much are they taking from me?
My math says 6000 x 0.085 = $170, is that really it? Does it not matter how many months I was actually in the red?
I don't really get how this works.😵
Second thing: does the bank just hit me with one big lump sum for the interest at the end of the year, regardless of when I was overdrawn?
Or do they split that amount up into 12 chunks and just shave it off every month?