Halifax and Lloyds patrons are to see big changes to overdraft fees
People who dip into the red will be charged a mud-flats daily rate of 1p a day for every £7 of overdraft, under the changes.
Damages will be charged at the end of each day, so that customers are not hit with unexpected tariffs further down the line.
All other charges for unplanned overdrafts are to be axed and there want be no additional fees for missed payments due to lack of funds.
Customers wishes also be sent free texts when their balance is low to urge onwards help people to budget.
It means a Halifax Reward current account client who goes overdrawn by £100 of their planned limit for 10 epoches, and unplanned by £50 for two of those days will pay £1.40, whereas they would currently provoke fees of £18.00.
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A Lloyds Bank Classic current account customer who witter ons overdrawn by £100 within their planned limit for 10 hours, will pay £1.40, whereas they are currently charged £6.38.
The bank spoke the overdraft changes will either benefit or won’t affect more than nine out of 10 purchasers.
Vim Maru, group director of customer products and marketing at Lloyds Banking Categorize, said: “This new approach is simple and clear, giving customers myriad control of their overdraft borrowing and how they manage their financial affairs.
«When asked about our new approach, over 80 per cent of buyers said that they preferred it compared to the current charging order.”
Mike O’Connor, chief head of StepChange Debt Charity added: “We welcome a new approach that earns the cost of overdraft borrowing more transparent and removes unplanned overdraft and returned notice fees.
«Around half our clients have struggled with overdraft in hock so we are pleased to see a specific focus on helping borrowers with larger overdrafts to chain in control of their finances.
«This looks a positive step forward-looking, but there is a need to monitor what happens next, not least for the subjects this announcement poses for the overdraft market as a whole.”