How To Stay Out Of The Red

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Once you got your money bank, it’s a good idea to make sure you don’t have to go through this again. To do that, you’ll have to keep a sharp eye on your account and take the time to read the terms and conditions. With unauthorised overdraft charges under the spotlight, most banks are making changes to compensate them for the anticipated loss of income. So the next time you get a terms and conditions leaflet in the post look out for:

• increases in interest rates
• increases in authorised overdraft fees
• reductions in grace periods for unauthorised overdrafts
• removal of caps on unauthorised overdraft fees
• increases in charges for bounced cheques and returned direct debits.

Check out printed information and banks’ websites for changes in any of these areas.

Dealing With Debt

If you find that your overdraft is getting out of control, then do something about it before it’s too late. Don’t worry – you’re not alone and there is plenty of consumer advice on the internet and elsewhere to help you. Trying to ignore it can make a bad problem worse, so instead, go to your local Citizens Advice Bureau to find out what your options are. You’ll be glad you’ve taken that step once your debt is under control.

Hands-On Banking

Instead of burying your head in the sand when it comes to your current account, avoid incurring unauthorised overdraft charges by setting up an authorised overdraft with your bank. That should put a stop to being charged for being overdrawn by a penny. Once you’ve got the overdraft set up, make sure you know exactly what it will cost you. Most of all, don’t go over the limit. If you think you might need more than your overdraft, check with your bank about increasing the overdraft limit. This will cost much less in the long run.

Do your research into bank accounts. All of the banks are competing for your business, with different packages on offer to suit most needs. Some even have preferential rates on overdrafts and most allow you to move your overdraft from one bank to another, so there’s no need to stay with a bank if you feel it is overcharging you. Check your account regularly to see what charges are being applied to it. And remember - don’t be afraid to challenge your bank if you feel the charges are unfair.