What benefits can I get from a student overdraft?
You should always aim to budget so that, whenever possible, you keep your balance in the positive. However, having a student overdraft will allow you to borrow more money than you have in your account at no charge (should you need to) – up to an agreed amount. This figure will be your authorised overdraft limit.
Many student accounts will allow interest-free overdrafts of up to an authorised overdraft limit of £3,000 during the course of your studies. Assuming you stay within your authorised limit, you won’t have to pay any interest on that overdrawn balance until after you graduate.
You’ll need to watch the wording though, particularly around whether the overdraft is ‘guaranteed’ or ‘up to’ – the latter means you’ll probably only get the advertised overdraft if you have a good credit record.
Often you’ll be offered freebies, such as railcards or Amazon vouchers. While you should never make your decision based on these deals alone, they’re sometimes combined with decent overdraft limits too and so can be a good option.