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97766
Overdraft charges hit record high
May 17, 2010
By John Rowling

Overdraft charges are currently at their highest level for ten years, according to recent figures.

Research carried out by financial data firm Moneyfacts revealed that such payments have hit the record high, despite a year of low interest rates.

According to the findings, current accounts holders are now paying an average of 14.22 per cent on their overdraft facility.

It has been suggested that banks are using the financial crisis to implement higher payments on products such as mortgages, loans, credit cards and overdrafts.

The data indicated that average rates have not been at this level since May 2000, at which time overdrafts were 14.78 per cent and the base rate was six per cent.

Michelle Slade, from Moneyfacts, said banks are offsetting the number of customers they have with higher charges.

"Banks have made significant changes to the charges they levy on unauthorised borrowing. The loss of income gained from a minority of customers is now being recouped from all customers who use an agreed overdraft," she explained.

Barclays, Clydesdale, Nationwide, Norwich & Peterborough and Yorkshire Bank are among the banks and building societies which have increased their rates in recent months.

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