Moneyfacts.co.uk says increased risk has caused current account interest rates to rise

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Moneyfacts.co.uk says increased risk has caused current account interest rates to rise

Tue 14th Sep 2010

Current account interest rates for overdrafts have increased because of higher perceived risk, according to Moneyfacts.co.uk.

Louise Holmes, a representative from the organisation, explained that banks currently feel there is a higher likelihood that people will be unable to pay back overdrafts.

As a result, the interest rate being charged on such facilities has been raised, in her opinion.

Ms Holmes urged people to speak to their providers about any alternatives if they feel they are paying too much money to have an overdraft.

"Providers are very much risk focused when it comes to any type of unsecured borrowing, such as overdrafts and credit cards," she remarked.

The Moneyfacts.co.uk spokesperson advised talking to the Citizens Advice Bureau if individuals find that their debt becomes unmanageable.

Recently, the company noted that banks are generating increased revenues by raising the interest rate on overdraft facilities, since many people regularly use this feature of their account.

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