Everyone has enjoyed having a pop at the Greek Government’s spending habits but figures released earlier this week suggest the UK is actually running up debt even faster.
The Government was reported to have borrowed a whopping £4.3 billion last month – just under £100,000 every minute – making January the worst month ever recorded, in terms of debt, for the UK.
All in all that sort of borrowing would see us rely on loans to the value of 12.8 per cent of our GDP which is more than the 12.7 per cent that Greece is set to borrow in 2009-10.
It can only be scant relief for the boffins at the Treasury that high-street borrowing rules don’t apply to national governments. If they did, and we were relying on a monster overdraft, we’d face paying annual interest of just under half a billion on January’s borrowing.
For those of us for whom an overdraft is more of a necessity, MoneyExpert.com has some top tips.
Keep your eyes open
The first thing to bear in mind is that the current account market is changing on an almost daily basis at the moment. Santander has recently shaken things up, introducing the Zero Account which won’t charge any fees if you exceed your overdraft limit.
On the negative side we’ve just seen Barclays up the rates it charges on a range of its packaged current accounts.
Some rates have been raised by as much as 50 per cent – the Graduate Account overdraft rate has been upped from 9.9% to 14.9% - so if you’re a Barclays customer and use your overdraft you’ll need to have your wits about you.
It’s not all bad
Current accounts have had a bad press and moves from the likes of Barclays certainly won’t help. That said, the OFT investigation into the current account market and the unauthorised overdraft fees that providers charge prompted quite a re-think from a number of banks.
Consequently there are some good deals for people who need to make use of an overdraft facility. Again, Santander are a market leader with their Preferred Overdraft Rate account. The account offers 0% interest on overdrafts for the first 12 months (so you’ll need to be back in the black after the first year). The Premier Account from Alliance & Leicester offers an equally appealing 0% deal for the first year. Switch online to that account and you could also earn £100 just for doing so.
Plan ahead
The key thing with current accounts, and especially when it comes to managing overdrafts, is to plan ahead and keep tabs of your finances. On accounts that charge interest for overdrafts the average rate is 5% higher for an unauthorised dip into the red than for one that had been pre-arranged. What’s more, ensuring you have an overdraft facility set up will mean you avoid the often very punitive one off charges.
It’s worth bearing in mind that now, more than ever, the current account market offers a wide range of products. While some providers offer a miserly 0.1% interest for in-credit accounts, others offer a fantastic 6% on accounts up to a certain value. The rates charged for overdrafts vary hugely as well so get online and find the account that’s best for you.
Click here to compare current accounts.
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