Many customers are unaware just how much they could end up paying for exceeding their overdraft limit. A new study from MoneyExpert.com has revealed that approximately one-third of accounts charge more than £60 for doing so.
The highest one-off fee is £67, while the lowest is £25. The average APR on unauthorised overdrafts is 25.57 per cent.
Chief executive, Sean Gardner, said: "When you could get stung for more than £60 just for going beyond your overdraft limit, people need to pay careful attention to their spending and the arrangement they currently have with their bank.
“Few don't charge at all so you should talk to your bank about a more realistic limit if you're incurring fees regularly. You can also query charges when they are imposed," he added.
The company found that an average of £44.98 was charged for a one-off infringement of an overdraft limit. Customers are often charged twice, first as a result of an ‘arrangement’ or ‘borrowing’ fee (£13.60 on average) and second if a cheque or direct debit bounces (£31.38 on average).
This far exceeds the newly capped £12 standard fee for defaulted payments on credit cards following action from the Office of Fair Trading. However, as a court case focusing on unfair bank charges is currently underway, MoneyExpert.com advises customers that a drop in these charges is unlikely to take place in the near future.
Mr Gardner explained: "Some people might think that their bank charges are on the verge of being reduced or scrapped following the recent OFT investigation and the glut of claims. But the court case continues and the charges remain.”
He believes this will encourage a large number of dissatisfied customers to swap banks in the coming months.
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