Overdraft charges rise over year

Wed, 26 Nov 2008

New research has shown that the cost of exceeding an overdraft limit has increased by 20 per cent over the past year.

The findings, from MoneyExpert.com, show that the majority of personal banking customers can expect to pay an extra £5 when they exceed the agreed limit on their savings accounts .

According to the organisation, last November most savings accounts charged £5 for transactions while took the customer into the red, such as bounced cheques, although this has increased to £30 over the past year.

In addition, the research noted the increased cost of borrowing in general, with the price of authorised overdraft borrowing rising from 11.67 per cent last November to 13.12 per cent today.

Sean Gardner, director of MoneyExpert.com, commented: "Across the board borrowing is increasingly expensive and those customers living in their overdraft need to be aware that in the majority of cases they'll pay a premium for this cash."

Mr Gardner also said that the increases are "surprising", given that banks were recently investigated by the Office of Fair Trading over the legality and justification of their fees.

Last week, MoneyExpert.com revealed lenders are tightening up their minimum income rules for new applicants, with 47 per cent of credit cards needing earnings of at least £18,000 to be successful.
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