The average interest charge on authorised bank account has rose by an average of 1.35% in the past four months, according to finance comparison website MoneyExpert.
This is putting a squeeze on borrowers meaning that many may have to seek debt help and advice in order to manage their finances and cope with the rise in bank overdraft charges. The authorised overdraft interest rate now stands at 13.06%, a rise from 11.71% in June. MoneyExpert predict that these figures are a sign of things to come, as banks may fight the court ruling regarding excessive penalty fees following the long-running Office of Fair Trading case against major banks.
Director Sean Gardener commented: “The banks are understandably concerned about the risk of bad debts and are tightening up lending rules. For customers with debts the message is clear. They need to work to reduce debts or ensure that they get the best possible rate for their borrowings and then work to reduce debt.