High street bank scraps fees for unplanned overdrafts
12th July 2017
Lloyds Banking Group will no longer charge fees for unplanned overdrafts.
Lloyds, which employs 900 people at its centre in Barnwood, says the new approach will be "simple, clear and will give customers more control of their overdraft borrowing."
The bank says it has listened to customer feedback and the changes will make overdrafts simple and clear from November.
There will be a single rate of 1p per day for every £7 of planned overdraft usage, but all fees and charges associated with unplanned overdrafts will be removed.
Customers who have given their mobile number to the bank will automatically receive free text alerts, including low balance alerts, putting them in control of their budget
With the new simple, single rate, a Lloyds Bank customer with the Classic current account who goes overdrawn by £100 within their planned limit for 10 days, will pay £1.40. Previously, they would have been charged £6.38.
The average debit balance for a Lloyds Banking Group customer using their overdraft is typically around £450 a month.
Prior to the changes Lloyds customers taking out unauthorised overdrafts faced interest payments at an annual rate of 19.89%, a daily charge of up to £10, the monthly charge of £6, and up to £30 a day for returned (unpaid) items.
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