Press Release Summary: Last week, we saw Barclays making headlines after the announcement that was made regarding the overdraft fees cut. The experts however say that there is more to the picture than just this.
Press Release Body: Last week, we saw Barclays making headlines after the announcement that was made regarding the overdraft fees cut. The experts however say that there is more to the picture than just this.
Going by the bank's words in the replacement of the unauthorized overdraft, they will introduce a "fundamentally new way for overdrawn accounts, which will significantly reduce cost for those customers who tread beyond their allowed overdraft limit".
Barclays, on August 18, will be launching a "Personal Reserve" which is being said to be a bulwark zone which is designed as security net for the customers who go beyond their allowed overdraft limit if they have one or if not, they go overdrawn.
The customer will be provided the facility of the Personal Reserve for five days at the cost of a flat fee of £22. These five days, the customer can use the buffer zone numerous times and all payments will be honored. However, they should not go beyond their Personal Reserve amount.
Customers can use this facility only if they wish to. Those not interested can opt out. Also, there are no individual transaction fee, no arrangement fee etc. also, the amount which is used within the Personal Reserve will not be charged any interest. The average amount in the Personal Reserve will be £250.
If the payments from the customers exceed the Personal Reserve amount, they will be bounced. However, the unauthorized transactions will be charged at £8 per transaction if they fall into the "guaranteed transactions" category in comparison to the £35 which is currently being charged.
Mark Parsons, managing director f current accounts at Barclays says, "Our customers wished for a clear and simple way to manage payments after they went beyond the allowed limits. This Personal Reserve will give a definition to the charges that have to be paid for the overdrawn transactions. Also, two simple and low charges will define when the payments will be made.
There is however more to the situation than meets the eye. The bank has decided to scrap its measly 0.1% credit interest from July 1 on the standard current accounts. According to a spokesman, customers do not value this rate and to the customer, it is worth just two pence per week. The authorized rate of overdraft will also rise from 15.6% to 17.9% starting June 2. Also, the current account offering is being revamped by the bank.
Barclays claims that these changes have been made keeping the requirements of the customers in mind. There are others however who say that the cause for this is more of a legal battle about the bank charges than customer feedback.
Head of current accounts at price comparison site moneysupermarket.com, Kevin Mountford says, "The move made by Barclays which reduces the overdraft charges as well as credit interest has come out as direct effect of the work that was being done by Office of Fair Trading and we had already warned that this was coming any time soon". Please visit our website at http://www.firstchoiceloan.co.uk/
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