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Is your overdraft at risk of being called in?

While the vast majority of the UK population are likely to have an overdraft facility which is possibly in use at the moment, there are concerns that UK banks are looking to reduce their exposure to risk yet further. We have seen similar action in the credit card industry, with some customers having their credit limits reduced and a portion of their debt requested via the "payment upon demand" small print. So is your overdraft at risk of being called in?

Even though there is no doubt that the financial landscape of the UK has changed for businesses and consumers up-and-down the country, if you do not over extend your overdraft and ultimately have enough money coming in to cover any potential debt at the end of the month then you should be okay. However, if you push your overdraft limit to the borderline and beyond on a regular basis there is the potential for your bank to call in all or part of your debt at a moments notice.

The vast majority of us do not realise that overdrafts are payable on demand if your bank sees fit to request repayment of the debt. In the good times it was highly unlikely this would occur, only in extreme cases, with many people actually seeing their overdraft limits increased automatically on an ongoing basis. We do need to retain control of our financial well-being and pushing your overdraft to the limit is not the best way to do this.

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