What is an Overdraft?

An overdraft is an extension of credit from a financial institution that allows an individual to continue withdrawing money even after their account value is zero. If you have an overdraft account, your bank will cover checks which would otherwise bounce; however, as with any loan, you will be charged interest on the overdraft amount.


See Also:

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Ask An Advisor: Help! I’m Running Out of Money

My First Step Out of Debt

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