Tip Tuesdays: If You’ve Got Overdraft Protection on a Savings Account, Call the Bank and Cancel It Right Now

Overdrafts are worse than personal loans. They make you spend money that’s not yours. They make the bank rich and you poor. Why would you ever want this to happen? If you’ve got overdraft protection on a personal savings account, call the bank right now and cancel this facility. If you don’t know whether your savings account has a line of credit (a fancier term for overdraft) attached to it, call the bank and find out.

I once had an overdraft facility on my Citibank Suvidha account. I called to close it. I was informed that once this line of credit is closed, I will not be given the option to start a new one again. I have never been happier than that one fleeting moment.

Tip Tuesdays is my new initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment or use this form to submit your tip. And, as always, do spread the word if you find this useful.

Further reading:

1. Tip Tuesdays: How to Close Your HDFC Bank Savings Account?
2. Tip Tuesdays: Use Your Credit Card for Emergencies Only After You Have First Created a Real Emergency Fund with Real Cash in a Savings Account
3. Tip Tuesdays: Why You Should Not Own a Credit Card From a Bank Where You Also Have Other Deposits
4. Tip Tuesdays: How to Close a Citibank Suvidha Savings Account?
5. Tip Tuesdays: How to Close an HSBC Power Vantage Savings Account?

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