Commonwealth Bank Overdraft

idonteven on 25/04/2015 - 23:31

I've just received an email saying that I've been invited to apply for a $2000 personal overdraft.

I've read through the email and the linked page. Just to confirm, it's saying that I can apply for an overdraft which grants me $2000 in the case that my Smart Access account has insufficient funds.

  • It'll take out whatever money I have in my Smart Access and the difference will be deducted from the overdraft?
  • Interest will be charged on the money due in the overdraft.
  • Can I lower the $2000 to another amount?

If this is saying what I think it's saying then I'm thinking that I will apply for it as I occasionally don't have enough money in my Smart Access for bills and other monthly payments (gym, phone, etc). This way I don't have to immediately transfer money from my other accounts or get charged admin fees for not making payments on time.

Let me know if I've got any part of this wrong, thanks very much.

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Comments

  • Rashed on 25/04/2015 - 23:59

    My gf got overdraft facility with commonwealth, 2k limit, and they do charge service fee. The fee is charged once in a month, only when you overdraw. So if you do not overdraw in a particular month, then they do not charge you. Better call and talk with the bank as your terms may be different.

  • Associatedcypher67 @ Commonwealth Bank on 26/04/2015 - 00:09
    +4

    If you do overdraw you only pay interest on the amount you overdraw, instead of a flat fee and not being able to pay the transaction. Its like linking a credit card to the arse of your savings account, so if you run out it starts pulling on the credit. Only downside is that $2000 then becomes a liability against your name and will impact your max borrow potential, which should be minor at most.

    • idonteven on 26/04/2015 - 00:18

      So I pay the interest as well as the monthly fee mentioned in rashed's comment?

      What do you mean about it being a liability against me? There won't be any liability if I have a history of paying it off every month right?

      • ozhunter on 26/04/2015 - 01:22
        +1

        What do you mean about it being a liability against me?

        He means that if you applied for a loan and would have got approved for $50k, they would now only approved $48k, since you have 2k overdraft.

        • TheAccountant on 26/04/2015 - 19:13

          I have $6000 in credit cards all paid in full, should I close the accounts since I don't use them or should I keep them open?

          I thought having an open line of credit paid off looks good on your credit as it shows you are capable of managing debt efficiently. Or does it just show liability?

        • Associatedcypher67 @ Commonwealth Bank on 26/04/2015 - 20:06
          +2

          @stingymonkey:
          In Australia we only have negative credit ratings, meaning if they did a credit check on you it only shows your defaults. There is currently legislation is place to allow both positive and negative scoring, but we are not quite there yet. The only exception to this rule is if you do all your banking through 1 institution, they have the ability to see everything on you, but if you are with CBA and wanna go to NAB, they cant tell. On an equally interesting note, if you apply for a home loan and it is declined for any reason, on your credit checks they only have the ability to see you applied, not if you were successful. So if you applied for a dozen home loan and they all got declined you record is going to stink pretty hard even if you have never missed a payment in your life. Food for thought

        • TheAccountant on 26/04/2015 - 22:01

          @cypher67:

          Thanks for the reply. As for the note, I learnt that the hard way while trying to buy a car to get to my first job after school. I'm currently in the process of fixing my 376/1200 VedaScore as a result of being declined heaps of loan applications but it's getting there. In retrospect, a negative credit rating has possibly helped me in the long term by preventing me from taking out a loan for the past 2 years :)

          Also seeing as you're an employee, if I went to apply for a loan in the future, with a good credit score and statements of my paid off credit cards, would that make me appear as a good borrower or would having those 2 cards be a liability?

        • Associatedcypher67 @ Commonwealth Bank on 26/04/2015 - 22:15
          +1

          @stingymonkey:
          Any form of credit is considered a liability. If its GE interest free, credit cards, Lease cars, over drafts, HECS fees… Anything at all where you are in debt to someone will impact your borrowing potential. On the flip side something as simple as being able to show you have paid your rent on time for 2 years will increase your borrowing potential. I don't work in branches as such, I work on Projects in the background but I'm currently working on one that is in line with these type of questioning; But I am by now means an expert. Highly recommend scheduling a Financial Health Check with your local branch, I know CBA do them for free and all these types of questions will be answered; who knows they might save you some money!

        • kev98 on 29/04/2015 - 20:02

          @cypher67: I believe veda do now provide a score, not sure if banks are using this yet though. I have noticed amex and citibank seem to be only ones who do regular checks where as commonwealth haven't checked my file in 4 years despite offering increases

      • Geewhizz on 26/04/2015 - 06:28
        +1

        What do you mean about it being a liability against me?

        It has the same effect on your credit record, as having a $2000 credit card.

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