Which? - Don't Get Caught Out by Unauthorised Overdraft Fees

Which? magazine has today delved into the murk of bank overdraft fees.

13 October 2013 - They found that authorised overdraft charges are towards the upper end of payday charges. What’s not reported is that from Smart-Pig’s own experience, unauthorised overdrafts are even worse. Here’s an anecdote from one of our founders:

Recently someone cashed a cheque I’d written a few months back. I’d completely forgotten about. Even though I hadn’t got an overdraft they let it go through, which took my balance to -£2.

Next time I went shopping I made a few small purchases and then my card bounced. Didn’t understand why, so I tried again.

When I eventually rang the bank I discovered not only had I been charged £25 for the honour of having my cheque use two unauthorised pounds, but also every time I tried to use the card whilst with a negative balance, I was charged an additional £15! I’d made a tenner of purchases in 2 transactions, then the two bounced ones, plus a subscription on my card had bounced.

So for a trip to Boots for toothpaste and Tesco for lunch, taking this customer £10 overdrawn for 24 hours, they’d racked up £25 + 5 x £15 charges. £100 to borrow a tenner for a day.

And the APR of that transaction?


Apparently that’s just too many digits for MS Excel to handle…

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× Warning: Late repayment can cause you serious money problems. For help, go to