NEW rules on overdrafts mean Brits will be hit with interest rates of up to 39.9 per cent in the next few months.
The shake-up comes after the Financial Conduct Authority (FCA) banned banks from charging rip-off overdraft fees, although they can still charge interest.
The much-needed crackdown comes after The Sun reported how borrowers are being charged more interest by banks for unauthorised overdrafts than if they took out a payday loan.
They followed Nationwide which put up overdraft charges in November up from 18.9 per cent.
How to cut down your overdraft costs
THERE are a few ways to cut overdraft costs, and which suits you will depend on your situation. Here are a few options advised by MoneySavingExpert:
Spend less each month – do a proper budget and have a look at what you’re spending on.
Could you cut your morning coffee, or go down a brand at the supermarket?
Or, are you paying too much on your bills – if you haven’t switched energy, insurance and broadband recently, then it’s likely you could save £100s or even £1,000s over a year.