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Derin Clark

Derin Clark

Online Reporter
Published: 10/01/2020

Barclays has announced that it is making changes to its overdraft fees that will see many of its customers with an arranged overdraft fee better off.

What changes is Barclays making to its overdraft?

Barclays has announced that from the 22 March 2020 it will be charging a single overdraft rate of 35.00%. This will replace its current overdraft fee of £0.75 per day on overdrafts of up to £1,000, £1.50 per day up to £2,000 and £3 per day for amounts over £2,000. Meanwhile, customers who customise their account with a pack and have an overdraft will have the first £100 of their overdraft interest-free and premier customers with an overdraft will have the first £500 interest-free.

How do these changes benefit customers?

These changes could see customers paying fewer fees on their overdrafts. With the current overdraft fee structure, a customer in their Barclays’ overdraft by £50 for seven days would be charged £5.25 and those £500 into their overdraft for 30 days would be charged £22.50. With the new overdraft fees, a customer who was in their Barclays’ overdraft by £50 would be charged £0.29 over seven days and if they were in their overdraft by £500 they would be charged £12.49 over 30 days. For those wanting to see how much a Barclays overdraft will cost them, the bank has a useful overdraft calculator on its website.

Why has Barclays made these overdraft changes?

Barclays has announced these changes in response to the Financial Conduct Authority’s (FCA) banning of fixed fees on overdrafts. In addition to this, the FCA has also ruled that unarranged overdrafts rates cannot be higher than arranged overdraft rates. These rulings have resulted in a number of banks and building societies changing their overdraft fees, however many consumers with an arranged overdraft have found that they have become financially worse off.

With the announcement of its new overdraft fee, Barclays has offered those with an arranged overdraft a better deal than before.

Rachel Springall, finance expert at, said: “It’s encouraging to see that Barclays Bank will be changing its tariff a few weeks in advance of the fee ban by the FCA taking place in April 2020. Daily fees are more expensive compared to a flat interest rate and it appears Barclays Bank has decided to undercut some big bank rivals with its rate of 35.0 % APR, such as HSBC who will charge 39.9% APR in March.

“Consumers will in fact find cheaper alternatives elsewhere, so it’s important they make time to compare deals and switch if their account isn’t working out for them. Banks may need to change other elements of their banking proposition due to the loss of daily fees, so keeping an eye on the overall package of an account is wise over the coming months.”


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