Financial expert warns: More and more Germans are finding themselves in need of overdrafts due to rising living costs

Financial expert warns: More and more Germans are finding themselves in need of overdrafts due to rising living costs

According to a report by www.tagesschau.de,

The rising cost of living is driving more and more Germans into overdraft facilities. According to a study by the Federal Association of Consumer Organizations, millions of people have already overdrawn their accounts or taken advantage of overdraft facilities within three months. The reasons for this lie primarily in the increased costs, for example due to inflation or rising energy prices. Around half of those affected say that high living costs are the main reason for using the overdraft facility.

The Federal Association of Consumer Organizations warns that the overdraft facility is not actually intended to finance life, but only for short-term purchases. Nevertheless, the vzbv does not demand an upper limit for overdraft interest, but rather suggests a limit on the overdraft limit in order to prevent people from staying in this loan for a long time. They also require a credit check before an overdraft facility can be used to prevent uncontrolled debt.

The Federal Government and the European Union have also become aware of this issue. In the coalition agreement it was agreed to fundamentally do more to combat excessive indebtedness. The EU is discussing whether consumer loans, which also include overdrafts, should only be granted if the credit rating is appropriate.

The current developments and the proposals could lead to changes, but whether and to what extent these will be implemented remains to be seen. Overall, however, it is recommended to take advantage of advisory services and hope for the federal government's help.