Beat banks' rate hikes

FIVE-MINUTE GUIDE TO... SURVIVING HEFTY OVERDRAFT FEES

- Harvey Jones

MILLIONS of people risk dipping into the red as job losses mount but running up an overdraft will get more expensive as the banks hike their rates to pre-lockdown levels.

Most banks will now charge 39.9 per cent even for an authorised overdraft, which is almost 400 times the Bank of England base rate of 0.1 per cent.

In April, the Financial Conduct Authority told banks to offer current account customers interest-free overdrafts of up to £500 for three months, to help them weather the Covid-19 crisis.

Customers have until October 31 to apply, while those who have already set up an interest-free overdraft should be offered a further three-month deferral if they request one.

The FCA told banks to offer similar support on credit and store cards, loans and catalogue debt. However, customers must still repay interest later, once they can afford to do so.