News Article

Banking customers paid out £650m in penalty fees in past year

Published 19 November 2012 by

Banking customers in the UK have paid almost £650m in credit card and bank account penalty charges in the last 12 months, The Telegraph reports.

According to research from the UK's multi-platoon finance management service OnTrees, nearly two million people have run up late payment fees or charges for using an unauthorised overdraft in the past three months - marking a 29% rise on the previous three months.

It seems that one of the reasons behind this increase in penalty fees and charges is the increasing number of people taking out financial products with more than one provider. In fact, it's estimated that a quarter of people in the UK now have financial products with several providers.

Three million people in Britain have a current account, a savings account and a credit card held with different providers. This can make keeping track of finances more difficult - leading to unexpected fees and charges.

However, there are ways that you could avoid being hit with charges you hadn't planned for. For example, there are some accounts that don't charge penalty fees - such as the thinkmoney Personal Account, an alternative to a standard bank account.

A spokesperson for thinkmoney said: "With our account, you can let someone else manage your monthly finances with the in-built budgeting service, without having to worry about charges you hadn't made allowances for.

"The account doesn't come with an overdraft facility, but even if you go overdrawn by accident you won't ever accrue any charges. We don't charge any fees for missed or rejected payments either. All you'll pay is a single monthly fee of £14.50 (or £21.25 for a joint account)."

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