Published On: Thu, Dec 12th, 2019

Martin Lewis issues warning as overdraft charges hiked by HSBC First Direct and M&S Bank | Personal Finance | Finance

“For smaller overdrafts, while it’s hiking charges new First Direct switchers get a free £50 and a £250 zero percent overdraft meaning if you’ve less than £300 it works.

“For larger Nationwide FlexDirect currently gives new switchers a 12 month zero percent overdraft – while there’s no set limit, it can be large depending on your credit score – yet after the year it goes to 39.9 percent – so see that as your time to pay it off.”

In June earlier this year, the FCA announced changes to the pricing of overdrafts.

An M&S Bank spokesperson told “From 14 March, the interest-free overdraft amount on the M&S Current Account will increase from £100 – £250 and going forward the interest rate charged on any overdraft facility above £250 will be charged at 39.9 percent EAR.

“In addition, new M&S Current Account customers will also select the overdraft amount that meets their individual needs, rather than receiving an automatic £500 overdraft, the first £250 of any overdraft amount will be interest-free.”

From March 2020, HSBC will remove the £5 daily fee for going into an unwarranted overdraft, and reduce the maximum monthly charge from £80 a month to £20 a month on unwarranted overdrafts.

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