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Dear MoneyMagpie team,
Do you know when the banks are going to increase their interest rate charges on overdrafts? Before Covid-19 they said they would increase interest rates on overdrafts by 40%. That was due to come in 1st April and since then they seem to have put this on hold because of the pandemic.
Appreciate your help on this. Thank you. Best regards, Susan
Hi Susan,
These changes CAN come into effect pretty much from now. Your bank has to write to you (this could be a text, email, or alert on your banking app, instead of a letter) to let you know if your overdraft is changing.
Some have already introduced the new rates in July, including: Nationwide, TSB, First Direct, Barclays, and Santander. Halifax and Lloyds are already on 39.9% rates and didn’t change (unless customers asked). Banks changing in August include HSBC, RBS (Natwest Select) and M&S Bank.
If you have a £500 emergency overdraft, it’s important to find ways to pay it off ASAP as the 0% leniency that was introduced in April is ending – so you’ll start paying fees.
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