January 2019

Bank employees very often offer clients to connect to additional banking services. One of these popular services is overdraft. Many people are scared by this incomprehensible term, because not everyone understands what an overdraft is and how it works.

After reading this article, bank card owners will no longer have any questions on this topic.

What does the word overdraft mean?

Overdraft translated from English means overspending or beyond what was planned. In simple terms, an overdraft allows you to receive credit funds from the bank to the client’s account if there is a shortage of your own money. For example, if a person pays with a plastic card in a grocery store, and there is not enough money on the card to make a purchase, then the bank will lend the client the missing amount of money. After such an operation, the borrower’s bank card balance will change to a negative value.

Many will say that an overdraft is not much different from a regular consumer loan. Nevertheless, there are plenty of differences between these two types of lending. We will compare these services below.

Why is the bank so willing to lend money and what is its benefit? An overdraft is borrowing a small amount of money for a short period of time, and the bank does not provide the opportunity to use this service to all of its clients. A credit institution that provides overdraft lending must be sure that the borrowed money will be returned to the borrower’s account in the near future.

The bank will allow salary card holders to use such services without any problems, since the client’s wages are regularly transferred to such a card. When money arrives in the account, the borrowed amount will be immediately debited from the bank card without fail. The service is also available for legal entities - the financial organization willingly gives money to legal entities. a person whose bank account regularly receives funds.

Types of overdraft

Overdraft is divided into two main types:

1. Allowed
2. Unauthorized

An approved loan is one that operates within the framework of a loan agreement, that is, all limits and amounts of money are approved by the bank and are specified in the current agreement.

An unauthorized overdraft occurs when the limits approved by the bank are exceeded. In simple terms, an unauthorized overdraft can arise when the borrower spends more loan funds than specified in the agreement. If an unauthorized overdraft occurs, the borrower must immediately repay the debt, otherwise the lender may impose sanctions against the debtor.

Exceeding the permitted limits can occur for several reasons:

• if payment is made in foreign currency;
• in case of failures in the bank's operation;
• due to the peculiarities of some payment systems (when the amount can be written off several times, or the payment freezes, and the client makes the next purchase, seeing that there are funds left on the card).

What is the difference between an overdraft and a consumer loan?

If you compare an overdraft and a consumer loan, you can find a lot of significant differences between these banking products. These services also have similar properties - they borrow money from a lender at interest. As for the differences, these are the terms, loan size, interest rate, repayment, speed of loan issuance.

Let's look at each point in more detail:

1. Deadlines. The time period for which the loan is issued is perhaps one of the most important differences between these lending methods. A consumer loan can be provided by a bank for a long term. An overdraft is issued to the borrower for a short period of time. In most cases, an overdraft loan must be repaid in 1-2 months.
2. Loan size. There is a direct relationship between the terms of the loan and the loan amount. If the loan is issued for a long period, then the loan size can be relatively large. The amount of a consumer loan can be many times greater than the borrower’s salary. The repayment period for such a loan extends over a long period. An overdraft is issued to a borrower with a loan amount not exceeding two of his monthly salaries.
3. Interest rate. The consumer loan rate also differs significantly from the overdraft loan rate. A consumer loan is issued with lower interest rates than an overdraft. Overdraft rates are higher, but the overpayment is ultimately less than on a long-term loan. If the loan term is shorter, then the overpayment on the loan will be small, despite the fact that the rate is significantly higher than that of a long-term loan.
4. Refund. The overdraft is repaid as soon as the money is credited to the borrower's account. If there are not enough funds to fully repay the loan, then the remaining amount of the debt will be written off from the next receipt of money on the card. To pay off a consumer loan, you need to pay a fixed amount (monthly payment) on a certain day of each month.
5. Issuance of credit. A regular consumer loan is issued to the borrower only after submitting an application and approval from the bank. This procedure may take several weeks. An overdraft is issued immediately when the card owner needs money.

The table provides structured information on the differences between a consumer loan and an overdraft.

Overdraft for legal entities

The bank allows legal entities to use an overdraft, thus legal entities. individuals are given the opportunity to use more funds than is available in their current account. The bank gives the necessary part of the money at interest up to the current limits. The lender issues limits, as a rule, no higher than 50% of the average amount of money received into the client’s current account. It should be noted here that an overdraft can be activated at the bank where the current account is opened.

For a large company, using an overdraft on its current account can be a good way out of a situation where there are no own funds. This method of lending will allow you not to stop production due to a long time for money to arrive in the organization’s bank account. Banks in most cases give money without collateral, as they are confident that funds will soon arrive in the legal entity’s account.

Types of overdraft for legal entities

A loan in the form of an overdraft for legal entities is divided into several types:

• classic (standard) overdraft is provided to the client 6 months after opening a current account;
• advance overdraft is used only by reliable clients for settlement and cash services;
• overdraft for collection for borrowers whose account turnover is at least 75% of collected revenue;
• a technical overdraft is given to the borrower with guaranteed regular receipts of funds to the account.

Conditions for obtaining an overdraft

Each bank presents its own lending conditions to clients. These conditions will be different for legal entities and individuals. Let's consider VTB 24's proposals for this type of lending.

Conditions for legal entities:

• loan amount – from 850,000 rubles;
• the maximum amount under the limit is up to 50% of the working capital in the client’s accounts;
• The total loan period under the program is up to 2 years (each debt must be repaid within 60 days).

Advantages of this program at VTB 24:

• overdraft is issued without collateral;
• no commissions;
• repayment period – 60 days.

Conditions and benefits for individuals:

• interest rate – 12% per annum;
• the debt is repaid when wages are received on the client’s card;
• There are no commissions for non-cash purchases;
• registration for payroll clients occurs without a visit to the bank.

All information on this service for this bank is given in general; full documentation can be found on the official website of the financial institution.

Registration procedure

To apply for the Overdraft service, you must visit the bank office that was chosen to activate this option. It is advisable to choose the bank where the client receives a salary or has a current account.

For an overdraft to work, you need to sign an agreement on the provision of this service. The bank will provide this option only to those clients who have confirmed their solvency with a certificate of income or the negotiable component of their plastic card.

Which banks offer overdraft?

Today, almost every bank can provide an overdraft for its customers. Some of the most reliable banks providing this service.

Overdraft lending is a profitable financial instrument for both the borrower and the banking organization. It allows you to receive the missing funds at the right time, while providing a constant, albeit not too significant, income to the lender.

What is overdraft lending

Loans of this type are essentially a completely ordinary loan, which is provided to an enterprise on the basis of some agreements and on predetermined conditions. This product differs from standard forms of loans in that it simply leaves the client the opportunity to take money. That is, according to the standard scheme, funds are transferred to the account of the borrower or a third party in agreement with the company. They are transferred immediately and in full. From this moment on, the company is obliged to return all the money with interest within the agreed period. But an analysis of overdraft lending suggests that it is given only when it is needed. In fact, this is more profitable for the company, because you only need to pay interest on the amount taken, and not on the amount that can be received. There are a lot of options and varieties of such loans.

Varieties

Overdraft loans are divided into four main types:

• technical,
• for collection,
• advance,
• standard.

The first type is a loan that is offered to the client without taking into account his financial statements and almost all other indicators. The main thing here is turnover and revenue. If a banking organization sees that large amounts of funds are being deposited into the accounts of a given person with enviable regularity, it can offer a technical option for an overdraft. It is risky, but beneficial for both parties.

The second type, which can accept overdraft lending, is suitable for large retail chains or other companies that regularly deposit proceeds to the bank. This is a more reliable option, in which the company can use the money even before it actually falls into the account, and after the proceeds are deposited, the entire debt is repaid. It should be noted that the agreements here can be very diverse.

The third type of loans is advance. It is the least profitable for the bank, but it is convenient for the company. This option of providing loans is most often practiced in order to attract a legal entity for servicing.

The last, fourth, is the standard type. It most closely fits the classic description of overdraft lending for legal entities. Its essence is simple. The client agrees with the bank that he will be able to use certain amounts at his own request. The financial institution, in turn, stipulates how long he can use the money and under what conditions.

For individuals

Overdraft lending to individuals is most often carried out by issuing a plastic credit card, on which a fixed amount is reserved for the client, which he can use at his own discretion. This type of loan is familiar to many people; it is understandable and accessible. The main problem here is that the bank does not actually receive any collateral, and in case of problems or non-payment, it becomes extremely difficult to return the money. The point here is that the amounts offered to individuals are not too large, and no one will sue because of them, since there will be more problems than benefits.

For companies

Overdraft is a more serious financial instrument. Here the amounts are much larger, and such loans are repaid much more often. Many enterprises prefer this over all others, as it is profitable, simple and convenient. True, in most cases the amounts are not too large, but as additional funds that can be put into circulation, this is quite enough.

Peculiarities

There are several main features that any overdraft loan has. The first is that there is no purpose for the loan. That is, most often any loan is intended for specific, pre-agreed purposes. But funds received through an overdraft, as a rule, can be directed in any convenient direction. The second feature is the loan term. Most often it is less than one month. In some cases - two or more, but this is rare. This does not mean the period during which the client, in principle, has the opportunity to take money, but after what time he must return it in full. The interest rate on such loans is usually higher than on a regular loan, but the number of required documents is much less. And one more important point: most often no collateral is required.

Overdraft agreement

This document is not much different from a regular standard lending agreement. The main differences are the conditions that are typical only for such a system as overdraft lending, as well as a strict link to the current account (for legal entities). Many banks stipulate the possibility of forcibly writing off money from the account of a potential borrower in the event that he himself does not repay his debt on time for one reason or another. The contract is drawn up on a standard form, includes details of both parties, clearly stipulates the financial part of the issue (how much, where, to whom, when, etc.), and will also most likely contain clauses on force majeure and conditions of non-refund of funds. Sometimes there is also other information that may be required in accordance with current legislation, bank regulations, client wishes, and so on.

Example for a legal entity

The company constantly receives certain approximately equal and stable amounts of funds into its account. Based on their analysis, the bank offers the company to open an overdraft. After agreeing on and concluding an agreement, the company gets the opportunity to use not only the money that it has in its account, but also the money that the bank gave it. Suppose that a company has the opportunity to conclude a very profitable deal, but it does not have enough of its own funds to implement it (it urgently needs to expand, purchase materials, and so on). And at this moment she can take the reserved money and fulfill all the conditions, after which she will receive additional profit. At the moment when the loan needs to be repaid, the company receives increased income into its account, which the bank, by agreement, immediately sends to pay off the debt. This was the simplest and most obvious example of overdraft lending.

Example for an individual

In the case of ordinary people, everything looks even simpler. A person receives a card from the bank, which he can either use or not use. There is a fixed amount. A client comes to the store and sees a product that he has long wanted to buy, but there was no money or other options. And now what you want is sold at a good discount. If the borrower did not have an overdraft card, he would be forced to save money further and ultimately purchase the product after the end of the promotion in the store, at a much higher price. And with this card, he pays for the purchase immediately and, most likely, saves a lot, especially if he can pay off his debt in a short period of time.

Overdue

This is a global problem for all overdrafts. True, most often it concerns individuals who cannot or do not want to return previously received funds. If the amount for the bank is insignificant, then the person may simply be lucky, and if they do not forget about him, then at least they will postpone the solution to the problem for a long time (during which very considerable interest will “drip”). But, of course, sooner or later it will still have to be returned. As soon as the bank realizes that the amount is already large enough to contact the court and debt collectors, it will begin proceedings and will definitely achieve its goal.

Advantages

Overdraft lending has a number of advantages. This includes such features as a small package of documents, no need to provide collateral, no fee for money that was not used by the client, and instant provision. That is, a person or legal entity may be interested in one or another element (or all of them at once) and that is why they will take a loan. For the bank, all this is not particularly convenient or profitable, but such a system makes it possible to retain customers, attract new ones and even make a small profit. Most often, financial institutions earn more not from the loans themselves, but from various services related to them. For example, a borrower may like working with a given bank and decide to place a deposit there, take out a larger loan, or receive a salary, pension, or other funding options through it. As a result, the overall profitability of one loan increases significantly, and many banks take this feature into account, which allows them to offer potential borrowers an overdraft at interest rates that are lower than market rates. Naturally, this is already convenient for clients who have the opportunity not only to receive “cheap” money, but also to be serviced by a suitable bank.

Flaws

Of course, an overdraft card or similar loan has some disadvantages. The main one is the extremely short period during which you can use the money. Unlike the standard form of lending, which provides for a year or even several years, an overdraft most often needs to be repaid within a month or several months, which is not very convenient. Don't forget about the intrusiveness of the service. Some banks open such loans even without the knowledge of the client, which irritates many people and ultimately can lead to significant losses. Among other things, some scammers use fake documents to obtain loans of this type due to the fact that no special papers are required from the client. As a result, they are not going to return anything, the real owner of the documents has nothing to do with it, because it is not his signature that is on the agreement, and the financial institution begins to suffer losses. There are fewer problems with legal entities, because you can always write off the amount of debt from the company’s current account. However, if there is no money on the balance sheet and is not expected, then again a problem arises with the return of unsecured funds. It should be noted that many banks have special services that monitor changes in the amounts received into borrowers' accounts and raise the alarm if the situation begins to deteriorate. In this case, the financial institution can simply close the overdraft, completely depriving the company of access to borrowed funds.

Results

Despite the presence of shortcomings, in general this system is very profitable and convenient, especially for clients. It allows you to receive as much money as required in a timely manner, which, in turn, makes it possible for individuals to purchase goods that are necessary, and for legal entities to invest additional funds in their activities, receiving much more than they will have to return later, even taking into account accrued interest . The main thing in all this is timely repayment. Even a small delay can globally ruin your credit history, which will prevent you from getting loans from other banks, and penalties, commissions, interest and other payments, which in the end will still have to be repaid, can greatly exceed all reasonable limits and even the original loan amount.

What is an overdraft?

Overdraft is the provision of money by the bank to the cardholder at interest for a short period of time. This term translates as “above the project” - that is, the bank allows you to spend not only the amount of money that is in the account, but also borrow a little (as people say, “go into the red”).

The bank provides an overdraft facility to the card user, as it is confident that funds will soon be credited to the client's account. For example, it could be a salary card, and money comes to it regularly. Or is it an account of a company that constantly uses it.

What is it for? The client may need funds for some unforeseen expenses. For example, the refrigerator broke down: living without it until your salary, if it is expected in 2-3 weeks, is inconvenient, but the purchase is still inevitable. Therefore, the client borrows money from a credit institution and returns it from the first salary. At the same time, there is no need to go to the bank to return the funds: as soon as funds are received on the card (account), the entire amount of the debt is automatically written off from them, along with accrued interest.

The amount of interest is usually relatively small, since the overdraft is provided for a short period of time. Because of this, many people get used to using this service. For example, if you take out an overdraft in the amount of 10,000 rubles at 20% per annum and after 5 days the money arrives in your account, you need to pay less than 30 rubles in interest. Few people who are accustomed to loans would not be interested in such an offer.

How is an overdraft different from a loan?

Due to the above, many people perceive credit and overdraft as the same products. In both cases, the borrower receives money from the bank for a certain period of time and pays interest for the use of these funds. But in fact, these products have a lot of serious differences:

1. Loan term. The loan is issued for a long period, but with an overdraft it is necessary to repay the debt within 30 - 60 days (depending on the bank).
2. Size. The loan can be taken out in large amounts, often several times higher than monthly earnings. Overdraft usually does not exceed the monthly amount of receipts into the account.
3. Payments. With an overdraft, the money is usually returned to the bank in one payment. If the first amount received is not enough, then the remaining amount is written off upon subsequent receipts. The loan is repaid in equal monthly installments, regardless of the amount of money in the account.
4. Interest. With loans, the overpayment is always less than with an overdraft. But due to the fact that the terms for these loans differ, the amount of overdraft interest is not psychologically perceived as larger.
5. Speed ​​of loan issuance and repayment. To obtain a loan, the client must go to the bank and submit the necessary documents. However, he does not receive the money immediately: sometimes it takes the bank several days to consider the application. When an overdraft is used, money is borrowed instantly as soon as it is needed and returned just as quickly - immediately after it is credited to the account.

What is required to provide an overdraft?

In order for the bank to provide an overdraft, you must submit a corresponding application. Usually this is enough to make it possible to use borrowed funds, although some banks also require you to provide certain documents (passport, TIN, insurance certificate, etc.).

But in any case, in order to receive an overdraft, the following conditions must be met:

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• money must constantly flow through the account, that is, there must be regular receipts of funds over a certain period (each bank determines its duration individually);
• the client must be registered in the same territory in which the bank operates;
• must have a permanent job;
• there should be no debts to the bank.

How is an overdraft calculated, what overdraft limit can the bank provide?

Each client at the bank has his own overdraft limit. After submitting the application, the bank makes a decision on how much it can be allowed to “go into the red.” This issue is dealt with by the credit expert.

Basically, the overdraft depends on the amount of funds that are regularly deposited on the card: the more money passes through the account, the greater the overdraft will be provided. Banks also take into account the economic situation in the country. During a crisis, for example, there is a high probability that a person will be left without work, so the overdraft limit is set less.

In addition, the agreement with the bank to provide a short-term loan is limited in time. As a rule, this is 6 - 12 months. It is believed that during this time a person’s financial situation may change, so the client will need to contact the bank again and write an application.

Technical (unauthorized) overdraft - what is it?

When a client spends all the funds from his account and goes beyond the established limit, an unauthorized (technical) overdraft occurs. The bank sets completely different interest rates for this loan amount. If under an authorized overdraft you have to pay, for example, 20% per annum for using money, then technically the percentage can reach up to 50 - 60%. In this case, this amount must be repaid within a few days. If this is not done, the credit institution may impose a large fine.

A person cannot simply use such “extra” money at will, since the bank sets a limit and does not allow the client to go beyond it. But there are still situations when a technical overdraft becomes possible:

1. Exchange rates. When a person makes a purchase from a ruble card in dollars, euros or another currency, the loan is calculated at the current rate. If the exchange rate changes before the debt is repaid, the loan amount may increase, and as a result, the debt may exceed the limit.
2. Presence of unconfirmed transactions. If the client made a purchase, and after that the funds were debited for another transaction that had already been completed, then he may also go into an unauthorized overdraft.
3. Technical errors in the bank. For example, by mistake, the same amount was deposited into the account twice. Once a problem is detected, these funds are automatically debited, and if an overdraft occurs on the card during this period, the limit may be exceeded.

Overdraft interest, or who is this type of loan beneficial for?

An overdraft is beneficial to both the borrower and the bank.

The client always has the opportunity to use the bank’s money; he does not have to run around among friends and look for someone to borrow several thousand rubles from when the need arises. You don't have to go to the bank and submit documents to get a loan. Everything happens automatically. And a person can use the money at any time of the day - even if at 3 o’clock in the morning there were not enough funds to pay at the hypermarket.

The bank also benefits from providing this service. He gets a reliable lender and confidence that the money will be returned. In addition, with this product, the credit institution is expanding the number of clients who are ready to use money at interest. Not every person likes loans, but using an overdraft is so easy that many simply cannot resist.

However, overdraft also has a lot of disadvantages. The client pays interest—and a lot of it. Plus, there are more temptations, since there is always the opportunity to buy what you want. But then you still have to return the money and live on less money. Often there is not enough money, you have to “go into the red” again... As a result, the client risks exhausting the entire limit and finding himself in an unpleasant situation when all the money goes to repay the overdraft, and the bank refuses to provide a new loan.

Therefore, when using an overdraft, it is very important to monitor the status of your account. There are situations when a person changes jobs and opens an account in another bank, believing that all debts on the old account have been repaid. But then the money is written off for using the card: the amount is small, but if a person has forgotten about it, then large interest rates can accrue over a long period. Therefore, when changing banks, it is important not only to close all debts on the old account, but also to refuse to provide an overdraft.

Many people in their lives have to deal with situations when money is urgently needed, but it is impossible to borrow a certain amount from relatives and friends. In such cases, banking institutions come to the aid of those in need, providing various loans and overdrafts.

Credit overdraft - what is it?

How does overdraft work for individuals and legal entities?

Today, a short-term loan can be obtained by both an organization and an individual. The conditions for obtaining a loan and the size of the limit are slightly different in each case.

• So, to obtain an overdraft for a legal entity It is necessary to provide the bank with documents confirming the solvency of the enterprise. With the help of the funds received, the organization can eliminate payment interruptions in its activities.

Typically, this method of providing a loan is in demand among enterprises that at some stage are experiencing a lack of money. The size of the overdraft varies from 250,000 rubles to several tens of millions, and it depends on the financial performance of the legal entity for the last six months.

• As mentioned earlier, individuals an overdraft is offered, depending on their salary. For gold card users, the maximum possible loan limit is set. Sometimes it can reach 500,000 rubles.
  In both cases, the expense of a short-term loan is repaid by constant receipts on the user’s card - be it profit from business activities or an individual’s salary.

Is it worth applying for an overdraft at a bank: advantages and disadvantages of the system

Today we can say with confidence that overdraft is one of the most popular short-term loans. However, before starting to use the loaned funds, each client should be aware of the disadvantages and advantages of this system.

What are the advantages?

• does not apply to targeted loans , so borrowed funds can be spent on any goods and services.
• To obtain a short-term loan you do not need to make collateral . Registration is easy and quick.
• Overdraft is a revolving loan , which means there is no need to re-issue it every time. A new limit on the card account opens as soon as the debt is repaid.
• Even if you have an overdraft service connected, interest is charged solely for the funds used.

Disadvantages of overdraft

• The most significant disadvantage is the high interest rate , much higher than for a conventional loan. This is due to the high risk of non-refund of funds.
• The amount of short-term loan is limited . Typically it ranges from 40 to 400% of the monthly salary.
• In case of going beyond the established limit the borrower is required to pay hefty penalties.

Thus, an overdraft is an excellent way to eliminate the problem of temporary lack of money. However, you must also remember that if you fail to repay the debt on time, you will have to pay a significant amount of money to cover the fine..

What is the difference between an overdraft and a loan?

Often, bank card users do not fully understand how an overdraft differs from a regular loan. Meanwhile, in fact, these two products are completely different.

Overdraft	Credit
Overdraft always tied to the client's current account.	Regular loan not attached to a bank account and is an independent service.
Provided for enough short term.	Issued for more a long period.
Very high interest rates for use, as well as significant penalties.	Moderate interest rates and fines.
Limited small amount short-term loan.	The amount of borrowed funds can reach big numbers.
To apply for an overdraft it is enough having a stable cash flow on the card account.	Required for registration large package of documents.
The amount borrowed can be used in parts. Interest is calculated only on the money used.	Loan amount issued all at once. Interest is calculated on the total amount of debt.
Overdraft repayment is carried out automatically from proceeds to a bank card.	Necessary repay monthly debt at a bank branch.
Overdraft automatically resumes after each debt repayment.	Loan repayment does not provide getting a new loan.
The initiator of the overdraft is exclusively banking institution.	To obtain a loan, the borrower contacts the bank on one's own.

Summarizing all of the above, we can summarize. Overdraft is a simple and affordable way to obtain a short-term loan. Currently, there is a significant improvement in loan repayment terms, as well as a decrease in interest rates, which makes this banking product even more attractive to customers. That's why to eliminate temporary financial difficulties, overdraft is a more acceptable tool than a regular targeted loan.

The size, terms of provision, and procedure for repayment of the overdraft are regulated by the banking service agreement. Its limit is set by the bank based on an analysis of cash receipts and transactions carried out on the card and can be changed over time. In any case, overdraft:

• is short-term in nature;
• entails the accrual of interest for using the loan;
• must be returned in full before the end of the billing period;
• requires security for obligations;
• provided if there are no complaints against the client;
• As a rule, it does not provide for preferential lending procedures, but exceptions are possible.

Types of overdraft

Overdraft happens:

in relation to the ownership of funds

• permitted (provided by the bank);
• unauthorized or technical (exceeding the established limit entails penalties);

depending on repayment terms

• continuous (the debt is repaid in installments over the agreed period, until the end of the contract);
• with zeroing (using this type of overdraft requires the systematic payment of the full amount of debt within the period established by the bank, most often within a month);

by the nature of the security

• blank, i.e. without security or with one guarantee;
• secured by the borrower's property.

After opening a current account, legal entities may be provided with advance overdraft. To confirm the solvency of the organization, it is necessary to present a certificate with performance indicators. Promsvyazbank offers the Credit-Overdraft service and makes it possible to receive 300 thousand - 22.5 million rubles for business development. However, the financial institution has set strict limits on the possible limit: the amount cannot exceed 50% of the average monthly turnover on the borrower’s current account over the last six months. But Baltinvestbank offers no more than 40% to current clients.

Offers for individuals

Not only organizations, but also individuals can use an overdraft. Naturally, the limit in this case is affected by the documents submitted, as well as the nature of the transactions on the account. For example, IntrustBank cardholders can spend 1 thousand rubles in excess of the balance, the service fee will be 28%. However, if the limit is exceeded, a rate of 36% will apply.

Unlike IntrustBank, SMP Bank provides an overdraft on more favorable terms for the SMP Transaero and SMP Aeroflot Bonus cards. Firstly, the maximum amount is 1 million rubles. (MasterCard Platinum), owners of gold and standard cards can count on a limit of up to 600 and 300 thousand rubles. respectively. Secondly, there is an interest-free period (55 calendar days). Thirdly, the fee for using the service is 19.99-27.99%. However, if an overdue debt occurs, the penalty will be much higher and will amount to 55% of the amount presented for repayment.

At Sberbank, gold card holders have the opportunity to receive an overdraft in the amount of up to 45 thousand rubles. at 20% per annum. In this case, the client must repay the overdraft debt in the amount specified in the report no later than 30 days from the date of this report. If you fail to repay on time and exceed the limit, the rate will increase to 40% per annum.

Which is better: credit limit or overdraft?

Of course, loans and overdrafts have common features, but these are two completely different services, because:

• in the first case, a credit card is issued, in the second - a debit card;
• the actual size of the credit line exceeds the overdraft amount;
• a credit card is opened at the client’s discretion, the decision to allocate an overdraft is made by the bank;
• the loan can be repaid with minimal payments during the entire validity period of the card, overdraft is returned in a shorter period of time and in full;
• The credit limit, as a rule, is not reduced by the bank, and the overdraft may be completely excluded.

Thus, when choosing one or another product, you should rely on your needs. If you plan to constantly use the loan, it is better