We all know payday loans can be an expensive way to borrow, but slipping into an unplanned overdraft is also costly.
See also: Half of all people think they are 'just about managing'
See also: Why treating your overdraft as a spending limit could be costly
Some major high street banks charge up to £180 for being overdrawn by £100 for 30 days according to research by Which?.
Being hit with charges is not a great situation to be in, so here's four ways to avoid them and one way you might be able to get your money back.
Avoid going overdrawn
The best way to avoid any overdraft fees is to avoid going into your overdraft. But if you regularly find yourself on the edge, particularly at the end of the month, this might not be so easy.
Making a sticking to a budget is a great place to start. This will allow you to see where the money is going and find places where you can cut back.
You're also 24% less likely to get hit with unarranged overdraft charges if you use a mobile banking app and text alert service, according to the Financial Conduct Authority (FCA).
Most importantly, it will give you an idea of how much money you have after all the bills have been paid so you can stick to a strict spending limit.
Arrange your overdraft
If you can't avoid using your overdraft, then make sure you have an arranged overdraft before you go into the red and keep within the limits you've agreed with your bank. This will at least keep the charges down.
The charges identified by Which? are for unarranged overdrafts. These are a lot higher.
Not all banks charge the same for going into your overdraft. So if you're worried about being stung by higher fees, this might be a great chance to switch bank accounts.
The Current Account Switch Service means you can now change banks for free in just seven days – and all you direct debits and standing orders are transferred as well.
A sure-fire way to not get hit with overdraft charges is to get rid of your overdraft. This way you can't go into the red.
Fee-free basic bank accounts are one option, but they do come with certain eligibility criteria.
This might seem like an extreme measure, but with some careful planning can be very effective.
Along with making and sticking to a budget, try paying for everything in cash. This way you always know how much money is available and can't overspend.
Make up the shortfall
If you regularly get hit with charges, you might need to look at other ways to pay off your overdraft.
With high bank fees and the dangers of turning to payday lenders, you might want to consider low-cost loans or zero-percent credit cards to cover the shortfall.
This is not an ideal solution and if this happens frequently or you often miss utility bills you might need to look for debt advise to solve the problem.
Make a claim
If you think you've been unfairly charged overdraft fees, then you might be able to claim the money back. You've got nothing to lose and it won't cost you a thing.
This article is provided by the Money Advice Service.