Banking customers using the overdraft facility on their current accounts are losing out as high banking fees are charged for the facility.
According to research by online bank Egg, a third of those using their overdraft facility pay up to £100 every year in banking charges.
Those exceeding the agreed overdraft limit on their current accounts are charged £25 an average four times a year, it has been revealed.
The bank blamed this on the fact that over 60 per cent of current account holders do not have an idea about how much money they hold in their bank accounts.
Egg's research report stated that most current account holders have "an extremely poor understanding of the financial status of their current account".
Having many direct debits and standing orders coming out of their current accounts is also to blame for people's ignorance about their bank balances.
Current accounts are "a melting pot for all our money matters" according to Egg's chief financial officer Mark Nancarrow.
However, he warns that these accounts do not provide banking customers with an accurate picture of where they stand financially at any one time.
Banks and financial institutions pocket up to £1.3 billion annually from charging people that exceed their agreed overdraft limit.
The House of Commons Treasury Select Committee recently voiced its concern about overdraft charges.
Overdrafts cost banking customers dearly
Overdrafts cost banking customers dearly
Mon, 12 Sep 2005
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