An alternative to your overdraft: An update from No1 CopperPot

24 August 2020

Overdrafts can be a useful facility to help fund unexpected bills, however it’s important to be aware of how much you could be charged to use it, especially with recent changes.

So what’s changed?
From April this year, the FCA announced that banks would be required to price overdrafts using a single annual interest rate, rather than charging fees. The aim was to make it easier for customers to compare rates. According to BBC News; some banks planned to increase the interest rates on their overdrafts to almost 40%.

From the 9th July, the FCA’s temporary rules for banks were withdrawn and some banks are back to charging between 35% and 39.9% for overdraft usage. If you like the option of having access to flexible credit in case of unexpected expenses, now might be a good time to check how much you could be charged if you were to go into your overdraft and have a look at other options.

We have a product which may help you
Many of our members use our Revolving Credit facility as an alternative to an overdraft or credit card.Revolving Creditis a flexible product which gives you a credit limit, allowing you to withdraw funds as and when you require them. You are only charged interest on the amount you withdraw and can overpay as frequently as you like, at no cost.