Barclays has sounded the alarm over a letter going out to customers, after a complaint from an individual regarding a change to their account. The customer reached out to the bank on social media to voice their anger, stating: “Despite never exceeding our overdraft limit, never being persistently overdrawn, today you significantly reduce our overdraft limit.”
They felt the timing was particularly harsh, adding: “In what is possibly the most stressful financial month. Oh and sending a text out after your lines have closed? Cynical move.” In response, Barclays stated that it has a policy of carrying out yearly reviews of overdraft limits to ensure they remain suitable.
The bank mentioned that customers normally get a letter detailing the review’s outcome, although you may get a text message as well. Barclays explained: “You should also receive a letter to advise of the outcome of the review, but we do sometimes send a text message to let customers know in advance.”
The customer was also told that letters can usually be viewed in the app or online banking within two working days of being issued. Barclays apologised for any upset caused and pointed the customer towards a webpage offering mental health support.
Currently, Barclays charges 35 percent interest on overdrafts, which applies to any used arranged overdraft up to the agreed limit. For instance, the interest cost of borrowing £500 would be £2.88 over seven days, £12.45 for 30 days and £25.21 for 60 days.
These charges apply daily for each day you’re overdrawn and are billed to your account monthly. Some overdrafts are set up with an interest-free amount, meaning interest is only charged on amounts exceeding this limit.
If your arranged overdraft includes an interest-free amount, interest is calculated on the overdraft amount used above this interest-free limit. If you don’t have an arranged overdraft but spend more than what’s in your current account, there’s no interest to pay.
However, customers should be aware that having an overdraft could impact your credit score. Barclays also announced in recent days it would be cutting interest rates on several accounts.
This includes the rate for the Barclays Everyday Saver, which will fall from 1.51% to 1.26% on balances up to £10,000. For those who have more than £10,000 saved, the rate is actually increasing from 1.16% to 1.26%.
The interest rate on the Barclays Rainy Day Saver is being cut from 5.12% to 4.87% on balances up to £5,000. For balances over £5,000, the rate will remain the same at 1.16%.
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