Cut overdraft costs

10 tips to pay less for your overdraft + how to pay it off

ways to cut overdraft costs

Overdrafts are a debt like any other. They're also set to be a very expensive debt, with 40% interest rates the new normal from April. For many, this could be a much-needed wake-up call to get out of their overdraft, or at least cut costs, though for others it's going to be a nightmare of increased charges - and the last thing they need on top of coronavirus issues. We've 10 tips to help you pay less and pay it off...

In this guide

  1. Know how much you owe... then budget to aim to pay it off

    the word budget being cut

    Make sure you check your balance often so you know if you're in credit or in your overdraft, and if so, how close to your limit you are (though banks must now send text/notification alerts if you're about to go into the red or you're near your limit).

    This is really important, as the way you're charged for overdrafts is changing. By April, current account providers must scrap hefty unarranged overdraft fees which can often be as high as £5 A DAY, and simplify per day arranged overdraft fees.

    Instead, they need to charge customers a simple interest rate for both arranged and unarranged overdrafts. As a result, almost all banks will charge an interest rate between 35% and 40% from April.

    But, as well as knowing how much you owe, it's best to also make a plan to get out of your overdraft – especially if you'll pay more as a result of the changes. Draw up a budget to see where your money is going. If you've nothing left at the end of the month, do a Money Makeover to see if you can save on household bills, or where you might be able to cut back. If you've then freed up some cash, use it to pay down your overdraft.

    • According to Financial Conduct Authority data, seven out of 10 people will either pay the same or less for their overdraft. This includes everyone who ever uses an unarranged overdraft – some 14 million people a year. While it's good (or indifferent) news for the majority, it won't be welcomed with open arms everywhere, as where seven out of 10 pay the same or less, it means three out of 10 will pay more.

      The rule of thumb for after the changes – at least for arranged overdrafts – is that if you don't go into the red by much and/or don't stay in the red for a long time each month, you'll pay less for your overdraft borrowing. If your overdraft is large, and you're always or often in it, you will generally pay more.

      If you're often or always in your unarranged overdraft, then you'll pay the same or less – though most banks have said they'll try and limit how far people can go into an unarranged overdraft by declining transactions.

      In the tables below, we've run the numbers for the main accounts we've talked about on MSE over the years over a variety of scenarios, comparing the cost before the changes to the cost after:

      Current account provider and main account Date changed/ changing Rate/fees under old structure Monthly cost under old structure  Rate under new structure (EAR variable) Monthly cost under new structure
      Nationwide FlexDirect 11 Nov 2019 50p/day £3.50 39.9% £0.65
      HSBC Advance 14 Mar 17.9% EAR £0.32 £25 at 0%, then 39.9% £0.48
      First Direct 1st Account 14 Mar £250 at 0%, then 15.9% EAR £0 £250 at 0%, then 39.9% £0
      M&S Current Account 14 Mar £100 at 0%, then 15.9% EAR £0 £250 at 0%, then 39.9% £0
      Barclays Bank Account 22 Mar £15 at 0%, then 75p/day under £1k, £1.50/day £1k-£2k, £3/day over £2,000 £5.25 35% £0.57
      RBS Reward 30 Mar £10 at 0%, then £6/mth + 19.89% EAR £6.35 39.49% £0.65
      NatWest Reward 1 Apr £10 at 0%, then £6/mth + 19.89% EAR
      £6.35 39.49% £0.65
      Starling current account 1 Apr 15% EAR £0.27 15%, 25% or 35% (depending on credit score) £0.27 or £0.43 or £0.58
      Monzo current account 1 Apr £20 at 0%, then 50p/day £3.50 19%, 29% or 39% (depending on credit score) £0.34 or £0.49 or £0.64
      TSB Classic Plus 2 Apr Up to £35 at 0%, then £6/mth + 19.84% EAR £6.23 39.9% £0.65
      Lloyds – Club Lloyds 6 Apr £100 at 0%, then 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500 £0 £50 at 0%, then 27.5% or 49.9% (depending on credit score) £0.21 or £0.35
      Halifax Reward 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £1.12 39.9% £0.65
      Bank of Scotland Classic Account 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £1.12 39.9% £0.65
      Santander 123 6 Apr £1/day up to £2k, £2/day on £2k to £3k, £3/day on £3k+ £7 39.9% £0.65
      Current account provider and main account Date changed/ changing Rate/fees under old structure Monthly cost under old structure  Rate under new structure (EAR variable) Monthly cost under new structure
      Nationwide FlexDirect 11 Nov 2019 50p/day £7 39.9% £6.52
      HSBC Advance 14 Mar 17.9% EAR £3.18 £25 at 0%, then 39.9% £6.20
      First Direct 1st Account 14 Mar £250 at 0%, then 15.9% EAR £1.42 £250 at 0%, then 39.9% £3.22
      M&S Current Account 14 Mar £100 at 0%, then 15.9% EAR £2.28 £250 at 0%, then 39.9% £3.22
      Barclays Bank Account 22 Mar £15 at 0%, then 75p/day under £1k, £1.50/day £1k-£2k, £3/day over £2,000 £10.50 35% £5.77
      RBS Reward 30 Mar £10 at 0%, then £6/mth + 19.89% EAR
      £9.51 39.49% £6.50
      NatWest Reward 1 Apr £10 at 0%, then £6/mth + 19.89% EAR
      £9.51 39.49% £6.50
      Starling current account 1 Apr 15% EAR £1.70 15%, 25% or 35% (depending on credit score) £2.70 or £4.32 or £5.77
      Monzo current account 1 Apr 50p/day £7 19%, 29% or 39% (depending on credit score) £3.36 or £4.94 or £6.40
      TSB Classic Plus 2 Apr Up to £35 at 0%, then £6/mth + 19.84% EAR £7.63 39.9% £6.52
      Lloyds – Club Lloyds 6 Apr £100 at 0%, then 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500 £9.36 £50 at 0%, then 27.5% or 49.9% (depending on credit score) £4.14 or £6.96
      Halifax Reward 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £11.73 39.9% £6.52
      Bank of Scotland Classic Account 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £11.73 39.9% £6.52
      Santander 123 6 Apr £1/day up to £2k, £2/day on £2k to £3k, £3/day on £3k+ £14 39.9% £6.54
      Current account provider and main account Date changed/ changing Rate/fees under old structure Monthly cost under old structure  Rate under new structure (EAR variable) Monthly cost under new structure
      Nationwide FlexDirect 11 Nov 2019 50p/day £3.50 39.9% £6.52
      HSBC Advance 14 Mar 17.9% EAR £3.18 £25 at 0%, then 39.9% £6.36
      First Direct 1st Account 14 Mar £250 at 0%, then 15.9% EAR £2.14 £250 at 0%, then 39.9% £4.90
      M&S Current Account 14 Mar £100 at 0%, then 15.9% EAR £2.56 £250 at 0%, then 39.9% £4.90
      Barclays Bank Account 22 Mar £15 at 0%, then 75p/day under £1k, £1.50/day £1k-£2k, £3/day over £2,000 £5.25 35% £5.75
      RBS Reward 30 Mar £10 at 0%, then £6/mth + 19.89% EAR
      £9.51 39.49% £6.48
      NatWest Reward 1 Apr £10 at 0%, then £6/mth + 19.89% EAR
      £9.51 39.49% £6.48
      Starling current account 1 Apr 15% EAR £2.71 15%, 25% or 35% (depending on credit score) £2.71 or £4.34 or £5.84
      Monzo current account 1 Apr 50p/day £3.50 19%, 29% or 39% (depending on credit score) £3.36 or £4.94 or £6.40
      TSB Classic Plus 2 Apr Up to £35 at 0%, then £6/mth + 19.84% EAR £9.26 39.9% £6.52
      Lloyds – Club Lloyds 6 Apr £100 at 0%, then 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500 £10.53 £50 at 0%, then 27.5% or 49.9% (depending on credit score) £4.41 or £7.36
      Halifax Reward 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £11.69 39.9% £6.52
      Bank of Scotland Classic Account 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £11.69 39.9% £6.52
      Santander 123 6 Apr £1/day up to £2k, £2/day on £2k to £3k, £3/day on £3k+ £7 39.9% £6.54
      Current account provider and main account Date changed/ changing Rate/fees under old structure Monthly cost under old structure  Rate under new structure (EAR variable) Monthly cost under new structure
      Nationwide FlexDirect 11 Nov 2019 50p/day £10.50 39.9% £58.76
      HSBC Advance 14 Mar 17.9% EAR £28.62 £25 at 0%, then 39.9% £58.27
      First Direct 1st Account 14 Mar £250 at 0%, then 15.9% EAR £23.50 £250 at 0%, then 39.9% £53.76
      M&S Current Account 14 Mar £100 at 0%, then 15.9% EAR £24.77 £250 at 0%, then 39.9% £53.76
      Barclays Bank Account 22 Mar £15 at 0%, then 75p/day under £1k, £1.50/day £1k-£2k, £3/day over £2,000 £63 35% £52.08
      RBS Reward 30 Mar £10 at 0%, then £6/mth + 19.89% EAR
      £37.55 39.49% £58.32
      NatWest Reward 1 Apr £10 at 0%, then £6/mth + 19.89% EAR
      £37.55 39.49% £58.32
      Starling current account 1 Apr 15% EAR £24.27 15%, 25% or 35% (depending on credit score) £24.27 or £38.91 or £52.08
      Monzo current account 1 Apr 50p/day £10.50 19%, 29% or 39% (depending on credit score) £30.24 or £44.42 or £57.64
      TSB Classic Plus 2 Apr Up to £35 at 0%, then £6/mth + 19.84% EAR £37.13 39.9% £58.68
      Lloyds – Club Lloyds 6 Apr £100 at 0%, then 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500 £91.66 £50 at 0%, then 27.5% or 49.9% (depending on credit score) £41.40 or £69.38
      Halifax Reward 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500 £95.27 39.9% £58.76
      Bank of Scotland Classic Account 6 Apr 1p/day per £6 up to £1,250, 1p/day per £7 between £1,250 and £2,500, 1p/day per £8 over £2,500. £95.27 39.9% £58.76
      Santander 123 6 Apr £1/day up to £2k, £2/day on £2k to £3k, £3/day on £3k+ £63 39.9% £58.82
    • If you already have a 0% overdraft, and your bank's letting you keep it (check, as a lot of banks have removed or decreased 0% overdrafts as a part of these changes), then there's no need to do anything – there's no cheaper borrowing than 0%.

      However, it may be worth using the tips in this guide to try to pay your overdraft off anyway. After all, the bank may choose to remove your 0% overdraft in the future, so it's best not to rely on it always being there.

  2. If you've got savings, use them to pay off your overdraft

    In normal times, this is the first thing to look at, and the easiest way to pay off your overdraft debt – if you have the means to do so. Having overdrafts and savings isn't sensible. Think about it...

    A £1,000 overdraft costing £20 a month in interest costs £240 a year, but the same in easy-access savings earns around £13 a year – at best.

    So pay off your overdraft with your savings and you're around £225 per £1,000 up each year. Once the overdraft's paid off, you can then work to build your savings back up.

    You may think: "But I'll have no savings if the boiler packs up or the roof falls in." True, but in an emergency, use the overdraft you've paid off and you'll be no worse off. To beat the fear, read Repay Debt With Savings?

    Important. This theory's still true, but if your income's been seriously affected by coronavirus, then you may be better keeping the savings to live off, and talking to your lender to see if it can help with your overdraft over the next few months until you can get back on your feet. 

    So, only really look at this if you have enough savings both to pay your overdraft off and live off. 

  3. Switch your overdraft to a year's interest-free deal... and try to use the time to pay it off

    0% image

    Nationwide's FlexDirect* account offers a year's 0% overdraft, as long as you haven't had a FlexDirect account before.

    There's no guaranteed overdraft limit though, as it'll be based off your credit score. So it could be smaller than your current overdraft. You can use Nationwide's overdraft eligibility tool to get an indication before you apply.

    Remember that the 0% rate will only last for 12 months, then you pay a hefty 39.9% EAR variable interest rate, so use the interest-free time to pay your overdraft off, if you can. Nationwide doesn't require a minimum monthly pay-in for its 0% overdraft, but you need to pay in £1,000+/month if you also want to earn interest if and when you're in credit. Read more information on this account in our Best Bank Accounts guide: Nationwide FlexDirect.

    If you have a friend with a Nationwide account (this includes savings too, not just current accounts), get them to refer you before you switch, and you'll both receive £100.

  4. Won't pay off in a year, but have a smaller balance (or only occasionally dip in)? Switch to a bank with a 0% buffer...

    stick figure jumping from one group to another to show switching

    If you don't plan to pay off your overdraft within a year, or can't afford to, it's worth looking at a different bank account. If you generally owe less than around £1,000, or only occasionally dip into your overdraft, consider switching to the M&S current account.

    It offers a £250 interest-free overdraft. On any overdraft borrowing above this, you'll pay 39.9% EAR variable interest. But even so, you still save over most other accounts by only paying interest on part of your overdraft.

    Do a quick eligibility check before applying to see if you're likely to get the overdraft you need: M&S Bank.

  5. Can't pay off within a year, and have a larger overdraft? See if you can move the debt to a 0% credit card, or another bank...

    If your overdraft is large – more than £1,500 or so – and you're always or almost always in the red, then it's likely you'll be one of the losers from April's overdraft changes, and you'll end up paying more. Here are the two main things to try:

    1. Can you do a money transfer? This is where, for a one-off fee of about 3-4% of the amount you're transferring, you use a specialist money transfer card to pay cash into your bank account. The cash clears your overdraft, so you owe the card instead, but at 0%. Generally, you can get around two years at 0% on these cards.

    Make sure you ask the bank to close your overdraft facility once it's paid off, so you're not tempted to run it back up again and have both the card and the overdraft debt to deal with. Our Money Transfers guide has a full rundown of how these cards work, and includes a link to our eligibility calculator, which soft searches your credit report and shows you which cards you're most likely to get.

    2. Can you get a cheaper overdraft with an app-based bank? From 1 April 2020, Starling* and Monzo will offer overdrafts at 15% and 19% – though only to people whose circumstances and credit history merits it (others could be offered 25% or 35% with Starling and 29% and 39% with Monzo). Before April, you'll pay 15% EAR variable with Starling and 50p/day with Monzo.

    If you get the cheapest overdraft rates with these banks, a £3,000 overdraft for 21 days in a month would cost around £25 with Starling and £30 with Monzo, compared with almost £60 for most other big banks.

    See if you are likely to qualify for an overdraft, and how much you could get: Starling overdraft checkerMonzo overdraft checker. With both banks, the checker will show you if you're likely to get the amount you're enquiring about. However, it won't tell you the rate you're likely to get – you'll need to apply to see this.

    If you do apply, both banks will do a soft credit check (which doesn't affect your credit rating) to give you a final offer of how much you can get and at what rate. If you don't like the offer, you don't have to go ahead. The overdraft-less account will be open, but you're able to close it straightaway if you prefer to stick where you are or want to look at other options.

    Another feature of these accounts is that it's also easy to control your overdraft limit in the app, so you can bring it down bit by bit as you pay it off. Plus, you get real-time notifications when you use your debit card and when you're about to go into, or are using, your overdraft, so you always know where you are.

    See our App-Based Banking guide for a full review of Monzo and Starling, and how the accounts work.

    Quick questions

    • If you can, then it's a decent option, as it's likely to have a cheaper interest rate than your 40% overdraft. Use our loans eligibility calculator to see which loans you have the best chance of getting.

      Bear in mind that most loan rates you will see in the calculator's results have "representative APRs". This means that only 51% of accepted applicants need to get the advertised rate. Others can – and usually are – offered a loan at a higher rate. However, a few lenders in the eligibility calculator are able to offer guaranteed rates. If you see a rate in a green box on any of your results, that's the rate you're guaranteed to get if you're accepted for that loan.

      If you do take out a loan to pay off your overdraft, make sure you ask your bank to lower your overdraft limit to £0, so you're not tempted to run the debt back up to your limit again, and have both debts to deal with.

      Remember that with a loan you have fixed repayments, so you need to have budgeted to be able to afford these. If you haven't, then you may be better sticking with your overdraft, or looking at the money transfer route above, which allows for slightly more irregular repayments – though you should still be looking to pay it off during the 0% period.

    • These options tend to only work if you have a good credit history. If not, there's a different way you can do it, but it's a bit risky, so only go for it if you're confident you know what you're doing. These are the steps...

      1. Use our credit rebuilder cards eligibility calculator to see if you've a good chance of getting any of the cards.
      2. See if any of the cards you've a good chance for have a 0% spending period (eg, Barclaycard and Amazon offer three months at 0%, Capital One offers four months). If not, don't worry, this trick can still work. The crucial thing is that the card you pick needs to have a lower interest rate (look at the card's APR) than your overdraft.
      3. Do normal spending (after budgeting) on the card, instead of via your bank account. But don't bust your credit limit.
      4. Money builds up in your bank account and reduces your overdraft.
      5. Close your overdraft once it's paid off (or at least ask your bank to reduce your overdraft limit).
      6. Then budget to pay the card off as quickly as you can.

      This method doesn't really help with the debt itself, but the idea is that it gets it at a (slightly) cheaper interest rate than you'd pay on your overdraft. While you might not be able to pay the card off within a few months, make sure you pay at least the card's minimum payment every month. One final warning: never use these cards to withdraw cash – you pay a fee, interest and the withdrawal's noted on your credit report.

  6. Can't switch? Talk to your bank to see if it can help you

    lady on phone

    If you can't switch and you're going to be paying more for your overdraft from April, call your bank and ask it to help. Your bank has a duty to treat its customers fairly, though it may not feel that way, especially if you're in your overdraft. This duty of care and forebearance is even more true in the current coronavirus crisis.

    The Financial Conduct Authority (the banks' regulator) has said it expects banks to help people who are set to pay more for their overdraft, suggesting that they could choose to waive or reduce interest, or offer a loan at a lower interest rate.

    So talk to your bank – especially if you're only just managing to keep afloat. Note that your bank may want something in return, for example, it may ask you to work with it on a repayment schedule to pay off your overdraft.

    Start it off as a chat, but if it doesn't go the way that you hope, get the bank to record it as a formal complaint (ask for written confirmation) – this will allow you to escalate it to the free Financial Ombudsman if your bank can't or won't help. If you're not good on the phone, we have a template letter in the links below, which you can adapt and send.

    Let us know if you've spoken to your bank about increased overdraft charges and how your bank responded. If it won't play ball, free one-on-one debt-counselling help may be suitable – especially if you've other debts as well. Try Citizens AdviceNational Debtline or StepChange. They're there to help, not judge. Full info in Debt Help.

    • email icon image

      Speak to your bank or check its website for the address or email address of the complaints department.

      Don't feel you have to be formal. Just explain your problem clearly, concisely and honestly as if you were explaining to a friend why you've been wronged. To help, we've put together a template letter to start you off – download it and fill in the blanks. (Use it to help start you off, but the more you write in your own words, the better.)

      Template letter: Bank overdraft help.

      Important: Keep a copy of the template letter – it'll be helpful if you end up needing to go to the ombudsman (see below).

    • financial ombudsman logo

      If you don't hear back from your current account provider after eight weeks, your complaint's rejected or you're not happy with the response, you can escalate your complaint to the free, independent Financial Ombudsman Service. This is the official, impartial body for settling disputes between individuals and financial companies.

      You need to fill in the Ombudsman complaint form.

      As with the first letter to your overdraft provider (which you could always copy and paste), don't feel you have to be formal. It's simple to fill in, though take care. If you need help filling this in, you can call the FOS on 0300 123 9123 or 0800 023 4567, and it'll guide you through the claim. You can send it back by post or fill it in online. Attach any paperwork to back up your case.

      Alternatively, you can use our step-by-step guide. It's written in Microsoft Word, so you can easily cut and paste sections or print it and have it next to you as you're filling in the ombudsman's form.

      The ombudsman will send you a confirmation letter to say it'll look into your case and get back to you if it needs any more information.

      When it looks at your case, the ombudsman will decide whether your complaint is justified. If so, it may then direct the bank to help you, though it looks at each complaint on a case-by-case basis, so what it asks your bank to do to help you might be different to what it asks someone else's to do to help them.

  7. Manage your way back into credit

    The above tips are mainly aimed at making your overdraft cheaper. This one is too, but it's more about changing how you manage your finances than it is about taking out a new, cheaper account to help. It'll take some hard graft, but there are a few things you can do to work your way back into the black. Here are our top tips...

    - Shift bill dates to minimise interest. Ask companies you pay to shift direct debits to the end of your working month. If paid on the 25th, aim for bills to come out around the 20th. This artificially boosts your balance for longer, so you're in the red less – but don't spend the cash before the bills fall due.

    - Budget. Moving bill dates cuts fees, but won't tackle the overdraft. So sit down and do a budget to find out where you can cut back.

    - Try piggybanking. Organise incoming cash and move it into bill pots at the start of the month, so you're not tempted to spend unnecessarily. Use this technique to make payments – eg, £100 a month – to your overdraft, treating it like any other bill. Read the full Piggybanking Technique.

    - Stop spending! Easier to say than do. Yet if you're in your overdraft, you need to urgently stop spending and reclaim control. It can be done – see our full Money Makeover guide for pain-free savings, and the Stop Spending guide to help with the painful savings.

    - Adjust your overdraft limit as you go along. Whenever you manage to lower your overdraft balance, ask your bank to reduce your overdraft limit to that amount. This will stop you spending up to the old limit just 'because it's there' – though make sure you've budgeted so you won't need to reborrow back up. If you think you'll need to reborrow, then don't adjust your limit. 

  8. If you've multiple debts, repay your most expensive first – this may now be your overdraft

    If you're looking at this guide and thinking, "well, what about my credit card, shouldn't I be paying that off too?" – don't worry, you're not alone. If you've more than one debt, it can be difficult to know which to focus on paying off first.

    Many people often forget their overdraft is a debt, kind of just seeing it as an extension of their own money. But with the introduction of these 40% interest rates for overdrafts, it means they're actually now DOUBLE the cost of most credit cards, though they may still be cheaper than guarantor loans or payday loans (if you have these, check if you're owed money from them being mis-sold to you: see our Payday Loan Reclaiming and Guarantor Loan Reclaiming guides).

    If you've multiple debts, write a list of what you owe, then see which costs most, including interest and fees for true costs.

    If your overdraft's the most expensive, make minimum payments on other debts to focus incoming cash on your overdraft. You could open a basic account for day-to-day banking, then just make payments to your overdraft, like you would on a credit card.

    Once the most expensive debt is cleared, you're ready to tackle the next, and so on.

    If you've multiple debts, free one-on-one debt-counselling help may be suitable. Try Citizens AdviceNational Debtline or StepChange. They're there to help, not judge. Full info in Debt Help, plus see our Persistent Debt guide if your credit card providers have recently written to you asking you to pay more (though due to the coronavirus crisis they now have to give you more time to pay).

    eraser rubbing out the word debt
  9. If you've paid your overdraft off and don't want to be tempted again, avoid the risk

    danger sign

    If you've paid your overdraft off, there are a couple of things you can do so you're not tempted to run the debt back up again - though in these uncertain economic times, you may want to keep the overdraft there as a safety net, even though you don't want to use it. 

    But, if you do want to be rid of the temptation for ever, it's possible to stick with your existing account and ask the bank to reduce the overdraft limit to zero. This means it'd likely refuse any payments in future that'd take you into the red.

    Or you could switch to an account which comes with no overdraft as standard, known as a basic bank account. These provide a no-frills, no-overdraft current account service. You'll still need ID and to be credit-checked, though this is mostly to check you are who you say you are.

    More on these accounts, plus our top picks, in Basic Bank Accounts.

  10. Can you reclaim past bank charges? Claire did: 'I got £865 back'

    From April, over-limit charges of up to £6 per day will be a thing of the past. But that doesn't mean you can't reclaim past charges, though a successful claim is only likely if the charges have put you into financial difficulties.

    Some inspiration from Claire, who emailed us: "Thanks to Martin's template letter, I requested a refund of bank charges. I will get six years' worth of charges back, and a goodwill payment of £70 on top... a total of £865!"

    You can find full information about whether you've a claim that might succeed and the template letters in Reclaim Bank Charges. If in dire straits right now, see our Debt Help guide.

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