Bank Charges - Rate Jacking

fondfarewell

I have just received a statement from my bank Barclays, which outline that my current bank charges are increasing from 14.9 % to 18.9% EAR which is a 4% hike - with no explanations offered - I have never experienced any problems in the past and regarded as a good customer! Is anyone else experiencing similar problems with their banks - does anyone know which is the best rate out there cos even though I have been with the same bank for well over 20 years I am finding these charges extortionate to say the least!!!

Inactive

Not quite sure what you mean, Barclays, like all UK Banks do not charge their customers for a Current Account, do they?

RayWolfe

Do you mean overdraft charges? If so, do a comparison with other banks. I don't think you'll find 18.9% too terrible in comparison. Easy for me to say, I don't go overdrawn.

opinions4u

fondfarewell wrote: »

I have just received a statement from my bank Barclays, which outline that my current bank charges are increasing from 14.9 % to 18.9% EAR which is a 4% hike - with no explanations offered - I have never experienced any problems in the past and regarded as a good customer! Is anyone else experiencing similar problems with their banks - does anyone know which is the best rate out there cos even though I have been with the same bank for well over 20 years I am finding these charges extortionate to say the least!!!

1) Explanations: Overdraft lending is high risk, unsecured and the level of defaults and write-offs over the past 12 months has increased. Therefore they have repriced to reflect that risk.

2) 18.9% is pretty typical across the industry. You may be able to get introductory offers that are cheaper (e.g. Abbey, A&L last time I looked) but when you end up on their normal rate after a year or so will you really be better off.

3) How much do you go overdrawn by? How much is it costing you in cold, hard ££££s? Why not try spending less than you earn so that you don't go overdrawn, or go overdrawn less often? Alternatively take out a loan over 12 months to repay the overdraft and make sure you remain in credit from that day onwards.

Lesson for life: Never rely on an overdraft. Stay in credit.