Barclays hikes overdraft rates
Barclays is hiking its overdraft rates by up to 4% because of rising costs and increasing numbers of customers failing to repay their debt.
Eight out of the 12 current accounts the group offers will have their overdraft rates increased from June 8, while three will be kept on hold and one will be reduced by 1%.
The group said its overdraft rates were not based on the Bank of England base rate, but rather the cost of providing the accounts, including the cost of the increasing number of customers who were failing to pay off their debt.
The Barclays Bank Account with a Premier Card is seeing the biggest increase, with the rate rising by 3.9% to 16.9%.
The overdraft rate on its Higher Education Account account is rising by 3.7% to 19.3%, while the rate charged to people who go into the red on its Additions accounts is increasing by 3% to 12.9%.
But there is better news for people with a Premier Life or Student and Graduate Additions accounts, as overdraft rates on these are being kept on hold, while people with a Current Account Plus account will see the rate they pay fall by 1% to 16.9%.
A Barclays spokesman said: "We have recently reviewed the competitiveness and costs of providing personal overdrafts.
"Where we have been able to we have kept our overdraft rates the same, or we have reduced them as in the case of our Current Account Plus. For some accounts this has unfortunately meant an increase.
"We do not make any changes lightly, and it is the first change to overdraft rates for many of these accounts for several years. Our overdraft rates remain among the lowest of our competitors."
The group overhauled its overdraft charges last year, introducing a personal reserve for customers who breached their agreed overdraft limit. Unauthorised overdraft fees and interest charges were replaced with a single flat fee of £22 for people who use their personal reserve for up to five days, although those who go beyond it still pay £8 for every payment that goes through or is bounced, up to five per day.
