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Halifax changes overdraft rules

Bank to introduce new daily charges
Halifax logo

Halifax has announced that customers will soon face daily charges if their accounts go overdrawn.

The majority of Halifax customers will see big changes to the cost of overdrafts under the new rules, although those who hold Halifax Student Current Accounts, Easy Cash accounts or packaged current accounts will not be affected.

The move comes after the successful introduction of the bank’s Reward Current Account in February. It pays holders £5 each month when they deposit £1,000 or more and charges customers a fee for each day of they month they’re in the red.

New overdraft charges

Halifax intends to roll out this daily charging structure across all of its full facilities current accounts.

Under the scheme most Halifax customers will have to pay £1 per day for overdrafts of up to £2,500, provided these have been arranged with the bank in advance. Arranged overdrafts of £2,500 or more will cost £2 per day.

Meanwhile, unauthorised overdrafts – which occur when customers unexpectedly or accidentally spend more cash than they have available in their accounts – will cost £5 per day from December 2009. This charge will apply no matter how many transactions take place on the account and irrespective of how far overdrawn a customer’s account goes.

Expensive overdrafts

During October, Halifax will write to inform all customers who will be affected by its new overdraft rules. However, until they come into force the bank’s existing overdraft rules will apply.

Under the current system customers face unauthorised overdraft fees of £28 per month, plus paid and unpaid item fees of £35 (subject to a maximum of three per day). This means a customer who accidentally drifted into the red could face fees of up to £133 in a single day.

Bank charges change

Which? Money editor James Daley says it’s no surprise Halifax has decided to change its overdraft charging structure: ‘In recent times several big banks have introduced new rules.

HSBC, Alliance & Leicester, Barclays and Royal Bank of Scotland have all altered how they deal with customers going into the red. Unfortunately, these banks all operate quite different systems, which means some consumers are confused about how much they’d have to pay if their accounts went overdrawn.’

Mr Daley added: ‘With the result of the expected imminently, it’s possible Halifax’s announcement reflects an expectation among banks that the old system of overdraft charging will be deemed unfair by the Office of Fair Trading.’

To find out how to get your overdraft charges back, read the . And if you’re confused about which current account is best for you, be sure to check out our clever current account finder and Which? Best Buys.

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