Do you have an overdraft authorization? This service offered by your bank allows you to continue using your account when it goes into the red. Be careful, however: contrary to what the term authorization might suggest, this checkout facility is not free and even generates costs before any use.
The overdraft authorization is the maximum negative balance, in amount and duration, which your bank will tolerate without considering that you are in a payment incident situation. Its amount is negotiable, but will depend on the regularity and importance of your income.
As for its duration, the overdraft is generally only authorized for 30 consecutive days, only 15 sometimes: the banks therefore ask that your account becomes creditable again (with a positive account balance) at least one day in the month, or every fortnight. .
This amount and this duration are contractual, and can therefore take the form of a separate service contract, or be included in your account agreement, or even in the service group offer that you have subscribed to.
Fees before even drawing on your overdraft
However, the overdraft authorization is not not a free credit. It can even be paid for before any use. Many banks charge, in fact, set-up costs (up to 50 euros), or even recurring annual fees. These are, depending on the brand, between 6 and 40 euros per year, according to our price list as of August 1, 2023.
Other banks apply proportional fees. They are sometimes set according to the amount of the overdraft authorization. This is the case for example with the CIC: 1% of this amount, with a minimum of 20 euros. Example: an overdraft authorization of 1000 euros will cost 20 euros per year, another of 2500 euros will be charged 25 euros.
More rarely, access to overdraft is fixed according to the amount used. Example: Banque Populaire Méditerranée, which charges 0.10% of the highest overdraft amount.
Agios: from 7%
Reminder: the authorized overdraft works like a loan. When the balance becomes negative, the bank receives debt interest, or agios. Their amount is calculated based on the duration of the overdraft and the amount actually used.
Calculation of fees
Debit interest = amount of overdraft debit rate number of days 365
Thus, an overdraft of 200 euros for 15 days at a rate of 7% ultimately represents only 58 cents of agios.
THE lowest allowed overdraft rates are found at online banks: 7%, for example, at Boursorama, Fortuneo and BforBank. Furthermore, few banks clearly display the lending rate applied. You will need to contact a customer service representative to find out more. Once the service has been subscribed to, the applicable rate will be shown on the account statement.
Please note that some brands apply floating debtor ratesbecause they are indexed to market rates, the bank base rate or even the usury rate, that is to say the maximum regulatory rate authorized for this type of credit, currently updated every month.
The fees are generally collected quarterlybut some brands charge them monthly.
It also exists special cases. Some banks thus integrate into their packages a franchise of agios, that is to say an amount of agios below which they are not billed. Others, on the contrary, generally impose on customers who have not subscribed to an account package, a fixed minimum agios, that is to say a minimum billing amount for which the withdrawal is triggered at the first euro in the red. This is the case, for example, with La Banque Postale (1.50 euros per quarter). A legal practice, but which can be considered abusive.