Do I need an overdraft?

The subject of overdrafts, and overdraft fees, has been in the financial press for many months now and will continue to grab the headlines for some time to come. However, there is no doubt that many people across the UK make good use of their overdrafts to give themselves a buffer between unexpected expenditure and everyday spending. But do you actually need an overdraft?

For many people the very fact that an overdraft facility is available is more than enough to give them comfort even if the facility remains unused. However, a larger number of people seem to treat their overdrafts facility as additional finance which should be spent month after month after month despite the fact that significant interest charges could be incurred. Over expenditure by many consumers in the UK before the recession left personal finances hanging on a knife edge and the onset of the recession has created a nightmare scenario for many.

In a perfect world an overdraft facility would have been well received during the current environment but many people have now overextended their facilities and are now drowning in debt. In the boom times it seems that nobody is willing to look ahead to possible setbacks in the future and it is apparent that more and more people in the UK were living the high life with limited asset backing behind them. Will those now suffering enormous credit card debt today learn in the future?