Credit card overdraft is a short-term overdraft granted by the credit card issuer to the cardholder within the specified limit when making purchases with the card.

For credit cards, allowing "consumption first, repayment later" and overdraft are important features. For debit credit cards, "deposit first, then spend". However, on the premise that it is determined to be a bona fide overdraft and repayment is guaranteed, cardholders are also allowed to overdraft an appropriate amount within a short period of time when they are in urgent need of funds. Overdraft interest is generally much higher than that of bank loans in the same period, and card issuers have a complete set of measures to prevent and pursue overdraft risk losses.

Extended information

According to the provisions of Articles 17, 18 and 19 of the "Credit Card Business Management Measures", credit card holders may conduct transactions within the statutory limits and periods. For overdrafts for consumption purposes, the overdraft limit is 10,000 yuan for gold cards and 5,000 yuan for ordinary cards. The maximum overdraft period is sixty days. Credit card overdraft interest is calculated as a daily interest rate of 5 within fifteen days from the date of signature or bank accounting, and a daily interest rate of 10 for more than 15 days. If it exceeds 30 days or the overdraft exceeds the prescribed limit, it is calculated as a daily interest of 15 .

The pros and cons of credit card overdrafts:

1. The overdraft cash withdrawal limit is set according to the card usage. The cash withdrawal standards of banks are different. The lowest one is not to exceed the credit limit. You can withdraw up to 30% of your credit limit, up to 100% of your credit limit.

2. In addition to cash withdrawal fees (cash withdrawal fees vary among banks), overdraft withdrawals at home and abroad must also pay interest and do not enjoy interest-free treatment.

Reference: Baidu Encyclopedia - Credit Card Overdraft