Banks are all over the news again at the moment for all the wrong reasons. According to research by the BBC's Panorama programme charges of up to 3650% are not uncommon for going overdrawn. Halifax is again in the spotlight as being one of the worst offenders, and it is not the first time it has come under fire for its excessive fees and charges. Recently that one time building society was taken over by Lloyds when its parent company, Bank of Scotland, got into difficulty in the credit crisis. This does not seem to have curbed its taste for overcharging its customers who go into the red. Other banks and financial organisations also receive heavy criticism of for charging well in excess of 100% interest for going into overdraft. The Business Secretary Vince Cable condemned the practice, stating that consumers were being ripped off whilst bankers were still receiving millions of pounds in bonuses.
Even before the credit crunch banks and building societies were being criticised for unfair charges. A high profile campaign by Martin Lewis of Money Saving Expert failed to bring the banks to book, and now we are all paying the price for this.
If you worry that you may be about to go overdrawn on your account and so incur some of these sky high fees and interest rates, then you may want to think about taking out a payday loan instead. Payday loans are short term cash loans that you can apply for easily online and have the money in your account within a couple of hours. With most lenders you are charged between £20 and £25 per £100 borrowed, which equates to an interest rate of around 22%, which is much cheaper than what you would be charged by a bank for going overdrawn. There is no extra interest on top to pay, and as some lenders do not credit score your credit record is not affected.
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