Bank account overdraft rates increasing

Bank account overdraft rates are increasing. Nationwide has just increased theirs and Barclays is set to follow next week.

According to moneysupermarket.com, overdraft rates have been increasing even though the Bank of England base rate has been cut.

Overdraft rates have risen by an average 1.54% since February 2008.

Nationwide this week increased its overdraft rates on its FlexAccount by a full 1%, taking it to 18.9%.

From 8 June, Barclays is increasing the overdraft rates on its Bank Account after the 12 month introductory offer from 17.9% to 19.3%

Head of banking at moneysupermarket, Kevin Mountford, said ‘The moves by Nationwide and Barclays are disappointing – whilst base rate remains static banks really have no excuse to hike prices. There is little doubt these moves will kick-start a series of rate reviews by others, meaning struggling banks customers are going to be stung with a steep rise in the cost of going into the red.’