It's never particularly made sense to me if I'm honest, you don't have enough money to stay out of your overdraft - so you then get charged more for using it.
But as of April 2020, banks and building societies in the UK will have to charge the same amount for all different types of overdrafts.
It's being touted as one of the most extreme changes in banking and will hopefully make using your overdraft simpler and easier to manage - particularly for more vulnerable customers.
"Our radical package of remedies will make overdrafts fairer, simpler and easier to manage," Financial Conduct Authority chief executive Andrew Bailey said in a statement.
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"Following our changes we expect the typical cost of borrowing £100 through an unarranged overdraft to drop from £5 a day to less than 20 pence a day."
Other parts of the announcement will also benefit you if, like me, you use your overdraft pretty much every month.
For example, they will no longer be allowed to charge those ridiculous fees for un-arranged overdrafts - it will be the same rate either way. Fixed daily or monthly charges will be ended, instead being replaced by a percentage of the full amount.
Refused payments will also be more reasonable and take into account the cost of the refused payment as opposed to it being a fixed rate.
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Credit providers are also now going to be made to do more to identify customers who are showing signs of financial strain or are in financial difficulty - helping them to do more to develop and put into place ways to reduce repeated overdraft use.
While we're on the money chat, the expert that is Martin Lewis has been urging first-time-buyers, or even people who may plan on buying a house in the next ten years, to open a Help To Buy ISA before November.
Even if you only deposit £1 in it to open it, you could get up to £3,000 from the government as a bonus. You can put in up to £200 a month with the government topping it up by 25 per cent when you come to buy a house. The maximum you can put in is £12,000, meaning the government would then top it up to an impressive £15,000. You have to use it by November 2029 though, and there's a minimum of £1,400 to qualify for the 25 per cent bonus.
Featured Image Credit: PA