Overdrafts can come in handy, there's no doubt. But it's easy to get into the habit of seeing it as a way to increase your spending limit each month, rather than as a last resort to get you to payday.
The trouble is, that habit can come at a price. Debt charity Stepchange reckons almost two thirds of people seeking help with overdraft debts have regularly exceeded their limit and faced charges of about £45 each time, or an average of £225 over a year.
Many are using their overdrafts to cover essentials and emergency costs, and they're ending up in the red more or less every month.
So what can you do to avoid potentially hefty overdraft charges? Of course the obvious answer is not to go overdrawn, but there are some other things to think about if you do need to use an overdraft in an emergency.
Avoid unauthorised (unplanned) overdrafts
Exceeding your authorised limit, or going into the red when you don't have an agreed overdraft with the bank, can be very costly. But if you think you will, talk to your bank and ask for a higher limit or an extension. You might be charged a fee, but it could be cheaper in the long run.
Don't ignore letters from the bank
Tempting as it might be to ignore them, letters from your bank may actually contain important information about overdraft fees or changes to your limit which you need to be aware of to avoid accidentally exceeding them.
There's also some evidence to suggest using a mobile banking app and text alert service can help prevent charges, so it might be worth trying that too.
Make a plan to tackle your overdraft
If you need to extend your overdraft make sure you don't leave it until the last minute to talk to your bank. And if you have a good explanation as well as a plan to repay the debt, the bank is more likely to be sympathetic.
Switching to a bank which offers an overdraft-friendly account with no fees or interest could be a good move if you know you'll need to make use of an overdraft. Switching is pretty easy these days.
If you want to stop regularly dipping into your overdraft, using a tool like our Budget planner could help identify those areas of household spending which could be tightened up, as well as giving you a much clearer picture of your outgoings each month.
This article is provided by the Money Advice Service.