Almost everyone is short in cash.
At the end of the month you run out of money, but you still have to bridge a few days. Some people can get through those few days without money, but there are also those who choose to be short in cash on their checking account.
Standing in short in cash seems like an easy option to get extra money quickly, but what many people don’t realize is that it’s a fairly expensive form of borrowing money. When short in cash, the interest rate can rise to more than 15% per year. In comparison with other loans, such as a revolving short in cashit or a personal loan, this is a fairly high percentage. Here the percentages are on average between 6.5% and 8%.
Packages are in front of short in cash
Some banks also charge fees for standing in short in cash. You have to take out a separate package, such as a ‘continuous c short in cashit’ or a ‘quarterly c short in cashit’, in order to be in the short in cash. These packages sometimes entail additional costs that are in addition to the interest costs of the short in cash. This makes short in cash standing a very expensive affair.
A maximum c short in cashit limit is attached to these packages. If you are even further in the short in cash, then a higher interest will be charged.
Unauthorized short in cash
It is also possible to have an unauthorized short in cash. This is possible at many large banks. This is calculated from even higher interest rates than is the case with permitted short in cash.
Benefits are in short in cash
The high costs are a disadvantage of being in the short in cash. Yet it also brings benefits. This way you quickly have some extra money at your disposal. If you are in the short in cash for a few days, then the costs are not too bad. In such a case, standing in short in cash is often even cheaper than taking out a loan.
The interest on being in short in cash is calculated per day. You pay a 365 th part of the total percentage on an annual basis every day. If you have € 500 in short in cash for a week, this means a few euros in interest costs. When you take out a personal loan, you pay more interest on this and you are also stuck with your debt for longer. Also, you cannot repay this loan suddenly without penalty.