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Be prepared for unexpected banking charges

Be prepared for unexpected banking charges

Category: Banking

Updated: 11/02/2014
First Published: 04/02/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

When consumers entrust their hard-earned cash with a bank or building society they would usually hope it to be safely stored until needed, but instead many are losing out due to bank charges.

In fact, 28% of bank and building society users surveyed have paid charges over the last year, according to the latest research from thinkmoney.

Overdraft fees seem to be the biggest culprit. 63% of those who were charged found themselves paying fees for authorised use of their overdraft, with such fees being a growing but controversial trend over the years.

Unauthorised overdrafts are also catching people out with 44.1% finding themselves paying arrangement fees, 26.8% being stung with daily charges and 24.2% of people being charged for cheques and direct debits bouncing as well as unpaid standing orders.

These fees have lead some customers (55.9%) into a vicious circle, pushing them into an unauthorised overdraft and therefore subjecting them to more fees, with over a quarter receiving five or more charges in the year.

Ian Williams of thinkmoney says:

"Unexpected bank charges can make it incredibly difficult for customers to manage their money. And our research shows that a quarter of Brits had to pay sums of up to £500 last year, which could have put some of their finances in a perilous situation."

So, if you've been caught out and want to avoid further charges, what can you do?

  • Regularly check the amount you have in your account and plan for anything that is likely to be paid out, keeping track of direct debits, cheques and other payments.
  • Compare current accounts and read the small print to compare charges.
  • Take a look at our savings accounts and budget for unexpected costs.

The key is to be prepared, ideally ensuring you don't suffer unexpected charges in the future.

What Next?

Compare the best available bank accounts for your needs

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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