Credit card overdraft is a basic function in payment processing. In our daily use, the credit card overdraft means the card holder consuming amount temporarily exceeds the credit limit that the issuing bank gives the cardholder for consuming and shopping with the credit card.
For credit card which allows consuming first and paying later, overdraft is a very important feature. Compared with debit card which is deposit first and then consuming, the credit card also allows overdraft under good intension and guarantee payment after compliance, the card holder can overdraft proper amount in short period for emergency. The overdraft interest is normally much higher than of contemporaneous loan of the bank. The issuing bank has a whole package of system to be on guard and recourse the overdraft loss risk.
Credit card overdraft interest means when your credit limit has been used up, you still use your card for consuming. The interest is calculated from the signature date or within 15 days as of the bank billed date according to 0.05% of the total consuming amount per day. If it exceeds 15 days the interest is 0.1% per day.
Additionally, regarding the overdraft withdraw, it means the bank provide small amount cash loan, which is support the user for adjusting funds flexibly in emergency. You simply hold your credit card to cash out from ATM or the bank counter for loan. If you are consuming in shopping mall, you just swipe your card to overdraft.
The over draft limit is set per your credit card using condition, different bank has different standard. The lowest is over 30% credit limit, the highest is 100% of the credit limit.
Except for the withdraw fee, overdraft cross border requires payment interest, without enjoying interest waived. You can pay back anytime per loaning, calculating per day and the daily interest is 0.05%.
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