Many people living on their overdrafts to get by

It has been reported that many people in the UK are still struggling financially to the point where they are having to live off their overdraft facilities.

It is thought that around one in ten people are now living off their bank overdrafts, resulting in more than five million banking customers being in the red all the time with their bank accounts.

The cost of this can vary from one bank to another, with reports claiming that some banks charge up to five times as much as others for this type of borrowing.

This was reflected in recently released figures, which showed that whilst some banks only charged around £60 a year for a £500 overdraft others were charging up to £300 for the same one.

However, the charges can also vary based on how the charges are applied, with some customers that go overdrawn for just one day a month being worse off because the provider then charges a flat fee on a daily basis.

The results of the research showed that around 38 percent of bank customers used their overdrafts once a year, and one in ten used this facility more than five times a year.

Many bank customers are now in the red all the time, and each month end up having to use their overdraft in order to make ends meet financially.

For many the cost of using an overdraft that is authorised is already spiralling, and the situation for those that dip into an unauthorised overdraft can be much higher.

With many banks hiking up overdraft charges and interest rates some of the consumers that find that they are permanently in the red with their overdrafts may find that they are better off consolidating the overdraft along with any credit cards with one lower rate consolidation loan.