HSBC to bring in single overdraft rate of 40% for UK customers

epa04611555 Customers use ATM machines outside an HSBC bank in central London, 09 February 2015. British media reports that the Hongkong Shanghai Banking Corporation's Swiss-based private bank helped wealthy clients evade millions of dollars in taxes, according to an investigation of thousands of leaked documents. Among those helped to evade tax were several clients who had been linked to arms trafficking, corruption and other crimes by the United Nations, the Washington-based International Consortium for Investigative Journalism said. EPA/FACUNDO ARRIZABALAGA

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HSBC is to bring in a single overdraft rate of 39.9% for UK customers from March 2020, as much as quadrupling the rate it charges some customers.

However, the bank is removing a £5 daily fee for going into an unarranged overdraft and introducing an interest-free £25 buffer on some accounts.

It follows a similar move from Nationwide Building Society in July.

It comes in response to tough new borrowing rules from regulators designed to protect consumers.

But one analyst warned that steep overdraft rates could now become the “new normal”.

HSBC UK currently charges rates of 9.9% to 19.9% on arranged overdrafts, but the higher rate will be applied across its whole range of accounts except for its student bank account.

The £25 buffer will apply to Bank Accounts and Advance Bank Accounts, providing leeway for those going slightly overdrawn.

 

Via BBC

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