Whopping overdraft charges from Halifax

The High Street lender Halifax is to increase its borrowing costs from December of this year, and this will see customers having to spend a small fortune on the cost of borrowing, with the lender planning to hike up borrowing costs significantly.

In December the lender will launch a new charge of £1 a day on its overdrafts and this will replace bank charges and interest, but could see customers having to pay far more in the long run for borrowing.

The new measures mean that customers could be paying up to £31 a month for borrowing on an overdraft facility of under £2500 and on overdrafts for above this amount the charge doubles to a massive £2 per day, which could end up costing the borrower even more. The bank has said that the reason behind this new move is to make it charging structure as simple as possible.

However, an official from the consumer campaign group Which? said: ‘This is bad news for any Halifax and Bank of Scotland customers who regularly use their overdraft as it’s effectively a big hike in charges. Anyone who’s unhappy with the new charging structure should vote with their feet by shopping around and switching to a current account that best suits their needs.’

Another industry expert said: ‘They claim this is in response to customers wanting clarity on charges, which is good, but an increase in fees of 300% is verging on criminal given that we know that the extra cash will go to fund unjustifiable bonuses. There was no warning of this, giving little time to pay off any outstanding sum. I am on a fixed income and their timing – approaching Christmas – is about to cause serious financial hardship.’