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Barclays Looks To Change Overdraft Service

In a move which looks very interesting in theory but may not be as good in practice, Barclays Bank has announced a number of changes to the way it deals with unauthorised overdrafts. Currently those who exceed their overdraft will be charged £35 and interest of 27.5% on the amount in question. However there are big changes afoot in an attempt to sweeten the impact of a possible loss in the high courts with regards to the current charging structure - and compensation claims in the hundreds of millions.

The new structure from Barclays will see each customer allocated a personal reserve of between £150 and £1,500 to cover above and beyond their agreed overdraft limit. If they exceed their overdraft and move into their personal reserve they will be charged £22 but they will be able to make unlimited transactions for five further days without further charges. It is unclear what happens after the five day period although one would presume the customer would need to cover the excess and return their account to normal or organise a new overdraft limit?

It is also worth noting that those who exceed their personal reserve will be charged £8 for each excess payment attempt although the tranactions will be blocked.

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