..to warn you that new overdraft charges are coming in April

[Hagbeth]

If you didn’t know about this, now is the time to act.

“ Those affected will be charged an annual equivalent of either 19 per cent, 29 per cent or 39 per cent - and those with lower credit scores will pay the higher rate.”

inews.co.uk/inews-lifestyle/money/overdraft-charges-changes-new-rules-explained-nationwide-hsbc-santander-customers-today-1344208

I got a letter saying it would be 19% for up to £5k. I thought it was odd as I haven't used it in 10 years but this explains it

Brecon
Thing is that 39.9% APR on a short term low value overdraft is a trivial amount.

39.9% per year = 0.1% a day
so on £100 for a week
its 76p interest

Yeah, wasn't really worried about the interest on £14 for 6 hours personally, just pointing out that it's already in place.

Brecon
And the cool thing with the new rules is that a 12p overdraft for a day no longer triggers a £15 charge etc

I am so confused, I bank with Lloyd’s and am constantly in my 1000 overdraft, I’m currently getting charged £1 something a day (I know I know I really need to clear it but not in a position to atm)
Will this charge increase?

I have some examples of the old and the new costs, from my letter. I have an Arranged Overdraft. There was formerly a £6 charge for any month that an overdraft was used. Now there is just an interest charge.

Example: cost of arranged overdraft £500 - 7 days old £7.75, new £3.24

Example: cost of arranged overdraft £500 - 30 days old £13.51, new £13.87

Example: cost of arranged overdraft £500 - 60 days old £27.23, new £28.12

@PigletJohn which bank are you with? If they are removing the free buffer it might be worth voting with your feet

Bros

I don't actually use an overdraft, it is there in case, say, a large direct debit goes out of the household account that has not been pre-funded.

Bros?

RBoS.

Yes my bank have written to me and saw it Martin Lewis' show. I've spoken to my bank and they've said it shouldn't affect me too much as my overdraft is on £350 but I do live in it. I'm going to work towards saving so I'm not living in it and reduce it £250 as it was for years. Only upped it 2 years ago as I was struggling and never got round to reducing it.

I think it will hit those who have larger overdrafts that they live in and will make it harder to to get out of debt. My bank suggested getting a money transfer credit card at 0% to get around it. Unfortunately they don't have such a card so would mean looking around.

It's really not great in my opinion.

I'll be charged less - wasn't expecting that!

but it seems to be there to "help" those people that go into an unauthorised overdraft

But it seems to be ‘helping’ them by charging those with an authorised overdraft equally high penalties?

Exactly fedup - those who have quite happily been using an arranged overdraft as part of their financial management are now being screwed to bail out the disorganised folks who were being charged for their unarranged overdrafts. It's like the whole PPI thing again, everyone gets punished because some people are too stupid to get organised and read terms and conditions. If your bank had a 5gbp daily fee for unauthorised overdrafts then the onus should be on the customer to either not go overdrawn or arrange an authorised overdraft.

My credit score is low (hovers around 300) so I’m likely to be charged higher rate with Lloyd’s 49.9%
My arranged overdraft is £1000, how much will I be charged daily? I’ve tried to work out out but keep getting £499 but that can’t be right?

Same here Floofen. I'm with Natwest and have an arranged overdraft of £1000. Completely in it. Going to have to scrimp and save to pay it off ASAP. Should have got out it ages ago but with other debts to pay off and Natwest only charging £6, I put it off.

This is interesting, thank you for sharing we have a large agreed overdraft which we use every month, the charge for it is minimal at the moment, so I'm concerned these changes will cost us more , but it's hard to work out exactly what the new charges will be.

@fedup21 - I only use an arranged overdraft but it will cost me less so not only those who go into an unauthorised overdraft.

@LetMeLayAmongTheStars

I think £499 would be the annual interest charged if you were overdrawn by £1000 every day of the year.

I don't know if they divide it by 365 (calendar days) or about 250 (business days). But if you were o/d half the time, the interest cost would be about £250. One-tenth of the time, about £50