Barclays overhauls overdraft costs
Barclays is writing to five million consumers explaining its new overdraft costs which apply from June 
Barclays has taken additional measures to lessen its overdraft fees in an effort to retain buyers.
The bank will introduce a £15 buffer for all overdrafts, meaning buyers will not be charged till their account stability is much more than £15 in the red.
It will also start charging a every day fee on overdrafts rather than a percentage calculation.
Catherine McGrath, managing director of Barclays Retail, told the Telegraph: “Customers have told us that it is as well hard to determine the price of borrowing. We want to enhance transparency and consumer management.”
The adjustments stick to a complete overview of Barclays’ overdraft pricing announced last year.
Some 5 million consumers will acquire a letter in the coming weeks explaining how the alterations will affect them ahead of the new charging method is enforced from June sixteen.
Barclays also said it will not charge paid transaction fees, when consumers do not have enough funds in their account and the bank pays the volume owed. Previously consumers faced up to £40 a day in charges.
The charge for unpaid transaction fees, when the financial institution refuses a transaction, is capped at £8 per day, down from a highest value of £40 a day.
After the £15 buffer is breached, overdraft costs will assortment from 75p a day to £3 a day depending on the dimension of the overdraft.
Barclays will also cap the optimum month-to-month cost for customers who fall into an unauthorised overdraft at £35.
Ms McGrath mentioned the move was made about buyer feedback, rather than an attempt to entice new consumers to the financial institution.
“I really do not feel switching rates will boost drastically – overdraft expenses are not what many men and women consider when switching current accounts,” she said.
However, Ms McGrath stated the alterations would increase customers’ present relationship with the financial institution. “It will make them less likely to leave,” she explained.
Banks have stepped up competition to improve buyer satisfaction following new specifications that make it less difficult to switch recent accounts have been launched final September.
Barclays said the changes to its overdraft costs would depart 70pc of its overdraft clients much better off or dealing with no distinction, while 30pc had been probably to pay out enhanced expenses if they employed their overdraft facility routinely.
Andrew Hagger of economic site MoneyComms stated: “I am confident buyers will find the fees simpler to realize but I am certain they’ll be far from pleased when they realise how a lot further they will have to stump up for utilizing an agreed overdraft.”
He mentioned those with smaller overdrafts will see the biggest enhance in cost.
Barclays stated it will begin calling clients to supply financial help as effectively as introducing an enhanced method of text alerts.
Citizens Tips Chief Executive Gillian Guy explained: “We’re pleased Barclays has sought and acted on our advice to make positive customers are entirely mindful of the alterations to their overdraft and are taking additional measures to assistance those who will knowledge the greatest change.”