Bank charges overdraft
WILL the first person to understand bank charges please turn on the lights.
It appears that 30million of us are fumbling around in the dark world of bank fees without a clue how much it will cost us if we go overdrawn.
This murky mess even affects those who have successfully claimed back their charges, and threatens to land them in a similar pickle once more.
Five million Brits think the overdraft is a failsafe to overspending when they are often more costly than personal loans.
The analysis shows banks charge on average 12.35 per cent for an authorised overdraft and an average 25.62 per cent for going overdrawn without permission, plus a typical one-off charge of £28.
Sean Gardner, Chief Executive of MoneyExpert.com, who conducted the research said: “Bank charges may be a hot topic but many people’s idea of how much they are being charged for their overdrafts is horribly wide of the mark.
“Average unauthorised overdraft interest rates are around 25 per cent and fees for going in the red without permission can be as much as £30.
“It’s critical that people check with their bank to ensure they are borrowing money at a competitive rate.”
Gardner added: “With recent changes in the Banking Code it’s now easier than ever to switch current accounts so if you’re unhappy with your bank you should consider jumping ship.
“It’s also important to realise that other forms of borrowing can be considerably cheaper than going overdrawn - for example zero per cent credit cards and personal loans.”