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Banking News Bank Charges For Authorised Overdrafts Up 10percent In 2 Years 18470487

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Bank charges for authorised overdrafts up 10% in 2 years

Bank charges for authorised overdrafts up 10% in 2 years

23 February 2010 / by Rebecca Sargent

Bank charges for authorised overdrafts have increased by 10 per cent in two years, Moneynet.co.uk has claimed.

The average interest rate for an authorised overdraft is up from 13.85 per cent in February 2008, to 15.32 per cent in February 2010.

According to Andrew Hagger of Moneynet.co.uk, as the Office of Fair Trading (OFT) battled against bank charges for unauthorised overdrafts, the cost of authorised borrowing on a current account has gradually been increasing in the background.

Commenting, Mr Hagger said: “No doubt lenders will point to increased risk and default levels as a result of the spike in unemployment seen during the recession. However, as and when the economy returns to a stronger footing and unemployment falls, I’m not convinced that the cost of borrowing will recede.”

The figures mentioned do not include a recent rate increase announced by Barclays, which will not come into effect until the end of April.

“With savings rates falling whilst the cost of loans, credit cards and overdrafts are heading in the opposite direction, it’s no surprise that many people are so disillusioned with financial services providers in the UK.”

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