Reduced overdraft fees from Barclays
14 August 2008 16:29:20
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| ?Personal Reserves? for customers from Monday |
One of the UK’s largest high street banks is scrapping standard unauthorised overdrafts – a move that the bank claims will “significantly reduce” the cost of overdraft fees for the majority of customers.
As of Monday 18 August, the old Barclays charging structure for customers who go overdrawn on their bank accounts without authorisation will be replaced with a “Personal Reserve” scheme.
Customers will now get a “Personal Reserve” worth between £150 and £1,500 in addition to their authorised overdraft or current account.
If customers use their Personal Reserve they will be charged £22 but will be able to make unlimited transactions for five days without receiving further charges or having payments bounced.
Account holders who go beyond their individual Personal Reserve Limit, which will be £250 on average, will then start to have their cheques and other payments bounced and be charged £8 per transaction.
The current system sees account holders receive a £35 charge and the unauthorised amount borrowed is charged interest at 27.5%.
Customers can choose to opt out of the Personal Reserve service, and Barclays say that 10% of its customers already have. These customers will not be liable for the £22 charge but will be charged £8 every time they exceed their authorised overdraft and have cheques and payments bounced whilst overdrawn.
Andy Harris, head of current accounts for Barclays, said: “We know from our research that customers appreciate certainty, simplicity and transparency.
“The benefit of the new structure is that a customer knows exactly what payments are going to go through, what they are going to get changed and when,” he added.
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