I have some bad news for people who have current accounts with Lloyds TSB, NatWest and Smile (a division of Co-operative Bank): your overdrafts have just become more expensive!
Banks are under increasing pressure at the moment, thanks to a demand from the Office of Fair Trading to reduce credit-card fines for late or missing payments, etc. to a maximum of £12 per slip-up. A similar OFT investigation into current-account charges is impending, which will further reduce banks’ profits. Together, these two cutbacks could cost UK banks an estimated £1.2 billion a year, so lenders are fighting back by raising their borrowing rates and other charges, for example, when you decide to pay off a mortgage….
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