Halifax and Bank of Scotland (HBOS) have increased their arranged overdraft charges for some customers, which will come into effect on December 6th – a move that could prove disastrous for many debtors.
Those struggling with debt management and holding arranged overdrafts of up to £2,500 will faced with fees of £1 a day and those with debts over £2,500 will pay £2 daily.
Consumer watchdog Which?’s personal finance campaigner Dominic Lindley remarked that this is “bad news” for clients of the bank who use their overdrafts regularly.
“If you’re overdrawn by £100, a £1 a day charge is equivalent to 365 per cent APR,” he said.
He advised those unhappy with this new development to consider shopping around for other deals and switch to a current account that is better suited to their needs.
Earlier this month, Nationwide increased its loan rates from 7.7 per cent to 7.9 per cent, despite the fact that the building society claims to be the best-buy for personal loans on the high street.
By Sarah Adie