Lloyds, Halifax, and RBS customers face major change and some will pay more
Lloyds, Halifax, and RBS customers face major change and some will pay more
The change will see some customers paying less while others will pay more
Crowds walking through a city centre
(Image: Richard Swingler )
Millions of bank customers have been warned about a major change coming to their overdrafts. Lloyds Banking Group, which includes Halifax and Bank of Scotland, is changing its overdraft charges and says millions of its customers will pay less, but some will pay more.
Money Saving Expert (MSE), founded by Martin Lewis, explained that the rate you will get will be based on an "affordability assessment", including your credit history and how you use any accounts you have with the banks. However, the group shared that 29.9% will become its new standard rate, down from 39.9% previously.
The £100 interest-free buffer on the Club Lloyds and Halifax Reward accounts will remain.
To find your current rate on your bank account statement, MSE advises searching 'Manage my overdraft' in the iPhone app, or try calling or web chatting with the bank.
Customers should look out for a letter, text or online banking message from the bank which will set out the changes.
If you do not receive any correspondence it means nothing should change for you. For money-saving tips, sign up to our Money newsletter here
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According to MSE the changes are being rolled out in stages. If your rate is going down you should get seven days' notice before the rate automatically reduces.
If your rate is rising, you will get 60 days' notice.
Earlier this year Martin Lewis issued a warning about overdrafts and offered tips to help people pay them off on The Martin Lewis Money Show.
Overdrafts are a way of borrowing money from your bank to allow you to spend more money than you have in your account.
During the ITV show Martin said many people hold the view that credit card debt is worse than being in an overdraft.
However, he said it is important to debunk that myth. He explained: "Many think credit cards 'bad', debit cards 'good'.
Article continues below
"Yet, if you 're overdrawn it's credit cards bad, debit cards worse as most overdrafts are 40% E.A.R Most overdrafts with virtually all high street banks and many others are ar 40% E.A.R. Credit cards [are at] 25%.
"Overdrafts are the most expensive form of high street debt. Treat it like a debt, you want to get out of it."
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Lloyds, Halifax, and RBS customers face major change and some will pay more
Lloyds, Halifax, and RBS customers face major change and some will pay more The change will see some customers paying less while others will pay more Crowds walking through a city centre (Image: Richard Swingler ) Millions of bank customers have been warned about a major change coming to their overdrafts. Lloyds Banking Group, which includes Halifax and Bank of Scotland, is changing its overdraft charges and says millions of its customers will pay less, but some will pay more. Money Saving Expert (MSE), founded by Martin Lewis, explained that the rate you will get will be based on an "affordability assessment", including your credit history and how you use any accounts you have with the banks. However, the group shared that 29.9% will become its new standard rate, down from 39.9% previously. The £100 interest-free buffer on the Club Lloyds and Halifax Reward accounts will remain. To find your current rate on your bank account statement, MSE advises searching 'Manage my overdraft' in the iPhone app, or try calling or web chatting with the bank. Customers should look out for a letter, text or online banking message from the bank which will set out the changes. If you do not receive any correspondence it means nothing should change for you. For money-saving tips, sign up to our Money newsletter here Article continues below According to MSE the changes are being rolled out in stages. If your rate is going down you should get seven days' notice before the rate automatically reduces. If your rate is rising, you will get 60 days' notice. Earlier this year Martin Lewis issued a warning about overdrafts and offered tips to help people pay them off on The Martin Lewis Money Show. Overdrafts are a way of borrowing money from your bank to allow you to spend more money than you have in your account. During the ITV show Martin said many people hold the view that credit card debt is worse than being in an overdraft. However, he said it is important to debunk that myth. He explained: "Many think credit cards 'bad', debit cards 'good'. Article continues below "Yet, if you 're overdrawn it's credit cards bad, debit cards worse as most overdrafts are 40% E.A.R Most overdrafts with virtually all high street banks and many others are ar 40% E.A.R. Credit cards [are at] 25%. "Overdrafts are the most expensive form of high street debt. Treat it like a debt, you want to get out of it."
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