Overdraft charges could cost you £300, moneysupermarket.com finds

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www.moneynews.co.uk > Personal loans > Overdraft charges could cost you £300, moneysupermarket.com finds

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Overdraft charges could cost you £300, moneysupermarket.com finds

Using your overdraft regularly without understanding the charges could leave you £300 a year out of pocket, moneysupermarket.com has reported.

Research by the price comparison site found that 13 per cent of people go into their overdraft over six times a year, while 17 per cent are permanently overdrawn.

Kevin Mountford, head of banking at moneysupermarket.com, said it is vital that customers understand that not all banks charge the same fees and "the key is choosing the right product for their borrowing needs".

Fixed rate charges are popular with banks, and charge you each day you are overdrawn. For someone who is frequently in the red the price comparison site recommends avoiding this type of account as charges will mount up.

The site advises switching to a current account like Alliance and Leicester's, which has a zero per cent overdraft interest for the first twelve months, and 50p a day to a charge limit of £5 thereafter.

Customers who are infrequently overdrawn should look for an account that charges interest on the loan as this will be a cheaper option for them, it recommended.

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