Barclays announces cuts in overdraft charges

Grovelawn Financial News 29/05/2008

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Flat fees available for two new accounts

Barckays bank currently charges its customers a fee of £35 if they exceed their agreed overdraft facility, it has now announced that it will launch two new accounts that will charge a flat fee of £8 for each transaction once the client has gone over their limit. Customers can opt out of this but will see any extra borrowing over the agreed amount'returned to drawer' and be charged the reduced £8 only.

A buffer zone exists of typically £250 that can be used without a charge unless they fail to pay the additional balance withing five working days, then they will be charged a fee of around £20. Current account customers can opt out of the buffer zone option and still only pay the additional £8 charge.

The Office of Fair Trading won a High Court ruling when it said that the fees currently being charged by banks for customers going over their agreed limit were subject to "unfair contract" rules, banks have lodged an appeal against this. Barclays also announced it will scrap credit interest on standard current accounts and from June 2nd interest earned on overdrafts will increase to 17.9 per cent up from 15.6 per cent.

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