Overdraft interest rate increases from Barclays

Barclays Bank has recently hiked up the interest rates charged on its overdraft facilities on many of its accounts, including its packaged current accounts for which customers have to pay a monthly fee.

Barclays customers that have an Additions Active account have seen the interest rate charged on their overdrafts rise from 9.6 percent to 12.9 percent. This reflects an increase of around 30 percent. Customers that have these packaged accounts with the bank pay £14 a month.

Interest rates on other accounts with Barclays have also increased, with rates on many accounts having gone up earlier this month.

The Higher Education Account, which is popular amongst graduates, has seen the interest rate increase from 15.6 percent to 19.3 percent, and this makes it one of the highest rates charged by a High Street bank.

All but one of the accounts offered by Barclays has seen the overdraft interest rates hiked up, which comes as bad news to customers in this particularly difficult financial climate.

An official from Barclay’s stated: ‘Where we have been able to, we have kept our overdraft rates the same or we have reduced them as in the case of our Current Account Plus. For some accounts this has, unfortunately, meant an increase. We do not make any changes lightly, and it is the first change to overdraft rates for many of these accounts for several years. Our overdraft rates remain among the lowest of our competitors.’

He also said that the changes had been because an ‘increasing number of customers failing to repay their overdraft as well as the cost of providing the overall package of services’.

Another industry official said: ‘Barclays has never been that competitive anyway. They’ve not paid credit interest for a while, and they’re the first to increase rates on their overdraft deals since last year when a number of businesses put them up.’

Tags: Bad news, Additions, bank accounts, overdraft deals, customer