Borrowers relying on £500 overdraft buffers will be stung when they vanish as Bank of England finds rates for going into the red are at a record high

Industry News | 31/10/20

Bank overdraft rates hit an all-time high last month and have more than doubled since March, according to figures released just before as many as 27million banking customers lose access to interest-free overdraft buffers of up to £500.

The Bank of England found overdraft rates rose 3.52 percentage points to 22.52 per cent in September, the highest rate since it began tracking borrowing costs four years ago.

It means that those borrowers still relying on a larger interest-free overdraft to cushion the impact of the coronavirus pandemic on their finances could be stung by expensive borrowing costs once the £500 fee-free buffer is phased out from the start of next month

Source: ThisIsMoney