Girobank joins the fee-raisers

GIROBANK has joined the rush to raise charges for unauthorised borrowing. From 1 July, the monthly fee for going into the red without permission will rise from pounds 10 to pounds 13.50.

People with authorised loans will see their fees reduced from pounds 10 a month to pounds 9.

Some other banks are reorganising their overdraft charges from next week. The general emphasis is on much higher charges for borrowers who overdraw for long periods without permission.

National Westminster will become the first bank to levy daily charges on accounts in the red by pounds 50 more than pre-agreed limits. The charge will be pounds 3.50 a day. Until now the bank has charged pounds 36 a quarter. An account overdrawn without agreement for a whole quarter would be charged pounds 315, an increase of 775 per cent over the previous charge.

But those who overdraw for only a few days will be better off.

Barclays will charge pounds 30 a month, up from pounds 25, for unauthorised overdrafts of more than pounds 200. The charge for bouncing a cheque will be pounds 25, up from pounds 20.

The interest rate on unauthorised student overdrafts is going up from 5 percentage points over the base rate to 7 points over base.

On 5 June, Midland is switching to monthly overdraft charges and the fee for an unauthorised loan on a non-interest-bearing current account will be pounds 17 a month instead of pounds 39 a quarter. The fee for an authorised overdraft is changing from pounds 15 a quarter to pounds 7 a month.