Finance News

Lloyds Bank Hikes Overdraft Charges Hurting Poorest the Most

Millions of cash strapped UK families will be hurt even more by hikes in the cost of going into the red by Lloyds, which is the UK’s largest bank. Lloyds, which is part owned by the state after the banking crisis will be charging account holders more to get an overdraft. They are raising their interest rates to a staggering 19.94%.
Lloyds’ interest charges on overdrafts will make going into your overdraft more expensive than spending using a credit card. The rates are the highest charged by the UK’s 5 largest banks putting financial pressure on the people who feel it the most, which is the average UK consumer that doesn’t have any spare cash.
Including its Halifax brand Lloyds provides over 22million current accounts to customers. The accounts that affect the most customers will be the Lloyds’ Classic account, which is a free account most likely to be used by the poorest customers.
At the moment Lloyds charges customers who arrange to have an overdraft between 12.43% and 19.28%. From October interest rates on all bank accounts will rise to a minimum of 15.43% and as high as 19.28%.
Banks are increasingly charging customers more and more, whether it is on the credit cards, loans, mortgages or overdrafts as they try to recoup lost money in lieu of the threats to profits because of the Eurozone financial crisis which has seen more and more countries needing bailouts.
Consumer groups say that the hikes are unfair on loyal customers who are toiling with record low savings rates and a general squeeze on incomes.
Founder of campaigners Consumer Action Group Marc Gander said: ‘This is a nasty, cynical move and is catastrophic for families, who are being forced to rely on overdrafts far more because of a financial crisis created by the banks.’