Big news for anyone who lives in their overdraft (like myself and I’m sure many of you included), big changes are coming this year and it’s definitely going to affect the way you bank.
In April 2020, a new legislation is coming through which will require banks to scrap their unarranged overdraft fees and replace them with interest rates that will be charged to the holder instead.
“The problem with overdrafts is that they’re a stealth debt,” said the finance journalist.
“You don’t apply for them, you just end up in them.
“Back in 2005, banks would charge £35 a pop for going overdrawn. It would be £35 per transaction, i.e if you made seven transactions, you’d be charged seven times.”
Lewis continued: “Last July, the regulator said that from April 2020, banks will no longer be able to charge you a fine for going over your overdraft limit,” said Lewis.
“That means that while they can still charge you what it costs them, they won’t be able to impose daily penalty charges.
“It took 10 years, but we got a win.”
If you have an arranged overdraft, it may be in your best interests to try and get rid of it before the new rules come into play, as you could find yourself in a worse off position than before.
[Featured Image Credit: ITV]