Co-operative Bank halts agreed overdraft charges

 

The Co-operative Bank is scrapping interest charges on agreed overdrafts for the next three months, in a move which it said would help customers struggling after Christmas and shake up competition.

A current account customer with an agreed overdraft of £2,000 could save £75 in fees over the "interest free" period.

The bank said customers will automatically have the interest charges put on hold on the overdrafts which qualify and they will not be asked at any point to pay the interest which would have accrued.

Robin Taylor, head of banking at the Co-operative Bank said: "This move again highlights how we are looking to bring some much-needed competition to the high street, by providing customers with a genuine alternative to the big five banks."

The offer applies to agreed "formal" overdrafts, where a customer has requested an overdraft service in advance, and this has been agreed.

It includes standard overdrafts provided with the Current Account Plus as well as formal overdrafts with the Privilege, Privilege Premier and smilemore accounts.

But it excludes Cashminder and Student accounts, Business banking and Corporate banking current accounts.

The interest free overdraft period covers debit balances from January 5 to April 4 inclusive and any account still overdrawn after this date will revert to the usual charges.

Any customer who applies for and receives a formal overdraft while the offer is running will also pay no interest on agreed debit balances from when their overdraft is set up until April 4.

A formal overdraft lasts for 12 months and the bank charges £20 to set up or renew it.

The Co-operative Bank said its research showed the typical British adult built up just over £749 of debt last year.

Just over a quarter (27%) of those who accumulated debt in 2011 expect to pay it all back in the next 12 months, with an additional quarter expecting to pay back half or more (26%).

But just under a third of consumers (29%) expect to pay back less than half and just over one in 10 (12%) do not expect to pay any of their 2011 debts off this year.

The most common forms of borrowing last year were on credit cards, through personal loans and arranged overdrafts.

But 7% of borrowers used store cards and 5% took out payday loans, according to the survey of 2009 adults.

Mr Taylor said: "Many people review their finances at the start of the year. As a responsible lender, we want to encourage customers to take control of their finances by providing them with the additional leeway to begin tackling any debts."

PA

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test