18th December 2019

If you have an overdraft with your bank, you will have likely received a communication today regarding the changes to your overdraft.

New overdraft rules have come into force today – Wednesday 18th December 2019.

What changes are being made and what does it mean for you?

The changes brought in by the Financial Conduct Authority (FCA) mean that your “available balance” or “available funds” in your current account can no longer include an overdraft.

This is to try and help consumers clearly see the difference between their own money and overdraft which is of course a form of credit.

As a result, hopefully consumers will not accidentally dip into their overdraft or if they are in their overdraft it is very clear to them.

The changes are part of a wide-ranging shake-up of overdrafts, which from April 6, 2020, will also see new pricing rules introduced.

HSBC & Nationwide have already their single overdraft rate of 39.9% APR to be introduced in March 2020, which could be as much as quadruple a customer’s existing rate.

You can read more about the rule changes here: https://metro.co.uk/2019/12/18/new-rules-overdraft-come-force-today-11924485/

Did you know that Plane Saver has an alternative to a bank overdrafts which is called Flexi Credit.

Flexi Credit is a revolving credit facility that offers members flexibility to access funds from £500 to £2,000, with the certainty of fixed monthly repayments.

It’s an ideal way to help you get your finances back on track if you’ve overspent. You can withdraw up to a fixed limit of £2,000 and then as you make your monthly repayments, more money becomes available to withdraw.

Find out more here: https://www.firstdefencefinance.co.uk/flexi-credit/

Written by
Jack Murphy

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