More financial institutions are moving to monthly rates on Gold Cards, which, when tallied up on an annual basis, are much higher than the base-rate-linked formula.
A Robert Fleming/Save & Prosper study shows that a number of banks still offer base-rate-linked Gold Card overdrafts. The best deals are from Bank of Ireland, Bank of Scotland, Clydesdale Bank, Grindlays, Robert Fleming, Midland Bank and Royal Bank of Scotland. They offer overdrafts of up to pounds 10,000 at 2.5 per cent over base rate, which comes out to 8.8 per cent annualised (8.9 per cent for Robert Fleming). Northern Bank and Coutts have similar schemes but at higher rates.
Gold Card overdrafts calculated on the monthly rate can be nearly three times as high as the most competitive base-rate-linked overdrafts on an annualised basis.
American Express offers a Gold Card overdraft of pounds 2,500 or more at 1.78 per cent per month (23.5 per cent annualised). Co-operative Bank's overdraft rate is for a minimum pounds 3,000 at 1.85 per cent a month, or 24.6 per cent a year, but it does not charge an annual fee.