The Overdraft Debt Trap
Banks often market overdraft facilities as a "safety net." However, when you combine high APR interest rates with flat penalty fees, the Effective APR of an overdraft can easily exceed 500%. It is mathematically one of the most expensive forms of debt you can take.
Financial Strategy: Never use an overdraft facility for long-term borrowing. If you are regularly dipping into your overdraft, a Personal Loan or a 0% Balance Transfer Credit Card will save you thousands of rupees in bank fees.