Debt help needed for high overdraft rates

Interest rates for bank overdrafts are now at a 10 year high, leaving many to seek debt advice as they try to get back into the black.

The average rate charged is now over 14 per cent (14.22 per cent), despite the base rate being kept at 0.5 per cent.

Many had hoped that the exploitation of bank customers was over, but despite winning their case with the Office of Fair Trading, banks still made changes to how they charged for unauthorised borrowing.

To avoid more personal debt woes, Michelle Slade of Moneyfacts.co.uk recommends that Britons move banks to prevent them being stung.

"Switching to an account with a competitive overdraft deal could save you hundreds of pounds," she commented.

Kevin Still, director of Atlantic Financial Management, says: "With high bank overdraft rates, it is probably worth considering ways of clearing the debt if the overdraft facility is fairly low.

"Being constantly overdrawn is expensive and it may be the time to look at a broader debt solution if you have other unsecured borrowing, perhaps including credit card debts.

"Credit card debts at interest rates of 18 per cent upwards can take decades to clear paying only the minimum contractual payments. Professional debt help may be a serious alternative."

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