Special check It's money that can save a lot of people, but it's a real trap for snowballing debt. You need financial literacy to avoid being stuck with the rope around your neck.
You are probably looking for For information on how to avoid getting into trouble with overdrafts, we've put together some useful information below that can help you better plan your personal finances.
While this "extra amount" allows many to pay their bills on time, it carries interest rates that can jeopardize your life. 2019 Central Bank data shows that overdrafts rank second in the default rate among Brazilians (15.9%), behind only revolving credit cards (36.7%).
According to news published in Economic Value, as of January 6, 2020, in accordance with Resolution 4,765/2019 of the Central Bank, the interest rate on overdrafts has a limit of 8% per month or 151.82% per year for individuals and MEIs (individual microentrepreneurs) who use this modality.
First thing you should do is:
Assess the need to use an overdraft.
To act wisely and avoid falling into a financial snowball, analyze your entire budget. Experts recommend that you carefully consider all your income and expenses and assess whether the overdraft amount is truly necessary.
If you need to use this modality for a period longer than 30 days, the best solution may be to look for other credit options with lower interest rates than this one.
Economists recommend using overdrafts only in emergencies and, preferably, when you can predict when you'll be able to repay the balance, as the interest rates are very high, which causes the outstanding balance to grow rapidly.
Special check, essential information
According to the Central Bank's resolution, if a financial institution decides to reduce a customer's available overdraft limit, it must notify the customer 30 days in advance. However, to increase the limit, the bank can only make the change with the customer's prior authorization.
If you've fallen into debt due to an overdraft, it's important to do your research before renegotiating your debt. Simulate options at traditional and digital banks and fintechs to find out which option best suits your repayment capacity.
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