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The Co-Operative Bank are clearly still feeling the festive cheer as they have announced their intention to scrap interest rates on overdrafts as millions pay off post-Christmas debts. In a bid to reduce mounting debt, the bank has announced that it will put agreed overdraft interest charges on hold for all customers until the beginning of April 2012, in order to “provide some extra financial relief.” Robin Taylor, Head of Banking at The Co-Operative Bank commented; “In these difficult economic times, we want to offer a helping hand to those customers, who may be struggling financially, and give some additional support to those whose finances may be stretched after the festive period.” Research from the bank found that the average amount of debt the British adult accumulated last year was a staggering £749. Brits have also seen their debts increase by 27% in the last year. The move is good news for Co-Op Bank customers who are struggling to pay off Christmas debts. Someone with a £2,000 overdraft could save almost £75 in fees over the three-month period. The research also found that many are finding it hard to cope with the added financial burden of the festive season. Whilst 27% of Brits who did accumulate debt last year intend to pay it all back, it is expected to take an average of 12 months to do so.
A massive 58% of people rely heavily on credit cards, 20% use personal loans and 16% use their arranged overdraft to help them financially. The offer is available to customers from 5th January to 4th April. After this date an account still overdrawn will revert back to the usual charges. It is available to those with ‘formal’ overdrafts which have been requested in advance. Whilst this brings relief for many, those with other banks will still face the debt pitfall of interest rates. Compare current accounts with Money Expert.
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