Overdraft bank charges soar to 19%
December 8th, 2010 - 12:23 am ICT by Aishwarya BhattLondon, Dec 7 (THAINDIAN NEWS) The new rates released by the Bank of England indicates that bank customers will now have to pay 19% for overdraft. The rate is unprecedented in the history of the United Kingdom.
Some financial analysts have condemned the rates claiming it is too exorbitant. The Bank of England indicated that the rate for short term overdraft was 19.09% in October. The country’s base rate currently stands at 0.5 percent and the new rate will undoubtedly put more stress on UK workers.
The rates have been at the 10 percent region previously but the new rate is rarely seen in the country. That though is not the most that can be paid for an overdraft. When the overdraft is unauthorized, the rate can be as high as 23 percent.
The fact that the inter bank rates stands at 0.7 percent has got some customers in the United Kingdom fuming. They claim that the banks are taking advantage of the public and charging exorbitant fees that can only make the current economic crisis worse.
Some banks though promised their customers that they will be by their side during the period. Director of Current Accounts at Lloyds said that, “The majority of our customers do not use an overdraft. For those who do, we have reduced and simplified our charges and introduced a number of new measures to help customers avoid paying charges altogether.”
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Tags: bank charges, bank customers, bank of england, banks, current accounts, economic crisis, exorbitant fees, financial analysts, history of the united kingdom, inter bank rates, lloyds, london, measures, overdraft, stress