Last week, in Bad News On Overdrafts, I revealed that three banks (Lloyds TSB, NatWest and Smile) increased their overdraft interest rates from 1 September by as much as 2.5% a year.
In my view, these three banks slyly used the quarter-point (0.25%) hike in the Bank of England’s base rate in August as a handy excuse to jack up the cost of borrowing for millions of current account customers. Bank profits are under pressure, thanks to rapidly rising bad debts and insolvencies, plus the near-halving of credit-card fees forced upon them by the Office of Fair Trading (OFT)….