01/01/03

According to new research from Egg, the world’s leading provider of digital banking and financial services, consumers look set to get hit for six in the New Year by interest rate charges on their current account overdrafts. Around 11.5 million people expect to be overdrawn on their current accounts at the start of 2003, with the average overdraft being £523 – or a collective debt of £6 billion.

Estimates are that 70% of UK current account customers are suffering at the hands of the Big 4 banks, with the average authorised overdraft rates currently over 16% EAR. Customers running an average overdraft with one of these banks can expect to be charged around £6.50 interest each month.

Egg is the only credit card provider that enables consumers to transfer balances from overdrafts and personal loans they hold with other UK financial services providers. The process is fully automated so customers can transfer at the click of a button as little as £100.

Andy Deller continues,

“Our research suggests that one million people will apply for a new credit card in the run up to Christmas and over the New Year period, proving that consumers are catching on to the great rates that are available if they shop around and switch.”

Egg’s survey of 1,000 UK adults reveals that those most likely to be overdrawn after Christmas are people aged between 16 and 24, where 45% said they would be overdrawn with an average balance of £626. Those least likely to be overdrawn are people aged between 55 and 64.

On a regional basis, those living in the North East, Yorkshire and Humberside are the most likely to keep a close eye on their current accounts this Christmas. Only one in five said that they would be overdrawn as opposed to around one in three in Scotland, Wales and the West of England for example.

Provided by Egg