Act now to cut overdraft

MILLIONS of Britons are seeing red as incomes are squeezed and job losses mount in the pandemic, and those who regularly go overdrawn now face punitive interest rates of almost 40 per cent.

- Harvey Jones

The banks recently doubled interest rates on authorised overdrafts to 39.9 per cent, twice the amount charged on most credit cards, piling pressure on borrowers at the worst time.

Experts say if you frequently go overdrawn, you must take action now to stop your debt from spiralling out of control.

If your finances have been temporarily affected by Covid-19, you still have until the end of this month to apply for a three-month interest holiday on your arranged overdraft, up to a maximum £500.

Customers who have already taken a holiday can request a three-month extension, or other support such as lower interest rates. However, remember that missed payments may have to be repaid later.