Did you want to increase your overdraft limit? Commonwealth Bank’s Overdraft Account can be an incredibly useful service, as long as you use it correctly. Commonwealth Bank’s overdraft account allows your bank to automatically give you an overdraft if your account doesn’t have enough money in it to cover purchases when they are made.
This can be beneficial if you need to make a purchase without having the cash on hand to pay for it, but it does come with a few drawbacks that you should understand before using this service frequently.
Here are some tips & on how to increase your overdraft Commonwealth Bank account.
Why Overdraft & Types
If you’re like most people, you probably don’t think about your overdraft very often. But if you have a checking account with the Commonwealth Bank, it’s important to know how to use your overdraft wisely.
There are two main types of overdrafts: an automatic transfer or line of credit (ACH) and an overdraft protection agreement. The latter is also known as overdraft protection or ODP.
When you sign up for ODP at the bank, they will give you access to a specific amount of funds that they’ll provide if you run out of money in your account before your next paycheck.
So make sure that this option is right for you before opting in! If you choose the wrong type of overdraft, you could end up paying fees on transactions that would’ve gone through normally if there were enough funds in your account.
Benefits of Increase Your Overdraft
1. You can access more funds when you need them.
2. An increased overdraft limit can act as a buffer against unexpected expenses.
3. It can help you avoid accruing expensive fees and charges.
4. An increased overdraft limit can give you peace of mind in knowing that you have a safety net in place.
5. It can help you manage your finances more effectively overall.
How Much Is The Maximum Overdraft Limit?
The overdraft limit you receive will depend on your creditworthiness, history with bank accounts, and ability to repay the overdraft. This means that while one person may have a $10,000 limit, another may have access to a $500 limit.
As your account becomes more established, your overdraft limits can be raised or new ones can be set up in line with your needs. Once this is done, the process for increasing your overdraft limit is the same as opening an account.
Things to Consider Before Increase Your Overdraft
Before increasing your overdraft limit, it’s important to consider a few things.
First, what is your current financial situation? Can you afford to increase your monthly payments?
Second, what is your history of using credit? If you’ve had trouble making payments in the past, it may be difficult to get approved for an increase.
Third, how much do you really need? An increase in your overdraft limit may come with fees and interest charges, so make sure you won’t be overpaying for the extra funds.
For instance, if you have $1,000 of unused balance on your account and are able to raise that limit by $2,000 more than the standard requirement of $1,500 but will incur fees of $35 per month – that would add up to about $470 for one year ($35 x 12 months).
You could alternatively get another credit card that doesn’t charge an annual fee.
Process of Increase Your Personal Loan
1. Applying for an increase is easy – you can do it online, over the phone, or in person at a branch.
2. If you’re approved, the amount of your overdraft will go up immediately – there’s no need to reapply every time you need more money.
3. You only pay interest on the amount of your overdraft that you use, so it’s a good idea to keep your limit as high as possible.
What to do if your Overdraft is declined
If your overdraft is declined, don’t worry! There are a few things you can do to increase your chances of being approved.
1. Pay your bills on time and in full, every time.
2. Know the limits.
3. Make sure your direct debits are up to date and paid on time.
4. If you have a credit card, make sure the balance is paid in full each month and you’re not carrying any debt at any time during the month.
5. Review your account activity regularly and pay off any overdue bills or loans before they become overdue, as this may put your application under review by Commonwealth Bank’s loan department, which will affect your approval for an overdraft facility or increase your overdraft limit.
After reading this article, we hope you have a better understanding of overdrafts.
Before taking the leap and deciding to opt for an overdraft, please thoroughly read through all of the information available on your bank’s website.
You’ll find all the details regarding fees, rates, and applicable terms and conditions there.