Bank charges fury as Barclays hikes overdraft fees despite bumper profits

19th February 2010

Barclays has hit its customers with a huge hike in bank charges, a mere two days after it announced it had nearly doubled its profits to £11.6bn.

The banking giant, which will pay out over £4bn in bonuses to its staff, is increasing the overdraft charges for two million of its current account-holders.

The increases will affect seven types of account where customers pay a monthly fee for extras such as insurance policies alongside their standard, everyday banking services.

Customers with the "Graduate Account" will see the biggest increases, with their overdraft rates rising from 9.9% annually to 14.9%. Fees for those with the "First Additions" account will go up from 14.9% to 18.3%. The "Current Account Plus" is increasing from 16.9% to 18.3% and the "Premier Life" account is rising to 14.9% from 12.9%. The remaining three accounts are also seeing hefty rate rises.

The new charges are in stark contrast to the Bank of England's base rate, which has stood at 0.5% for 18 months and customers who are unhappy are being urged to take action and switch banks.

Peter Vicary-Smith, chief executive of consumer service Which?, said: ""The base rate hasn't gone up and Barclays have just announced bumper profits so many of their current account holders will be angry at this sudden increase in overdraft rates.

Any Barclays customer who's unhappy with this rate hike should vote with their feet by switching to a current account that best suits their needs.

"Any Barclays customer who's unhappy with this rate hike should vote with their feet by shopping around and switching to a current account that best suits their needs."

Barclays defended the huge increases, saying that the majority of their customers will remain unaffected.

But the TUC, which has campaigned against excessive pay at Barclays, said that customers will be "absolutely furious" and called for "widespread reform" of the banking sector.

Claims Financial