Monday 8th of June 2009
Britons have been warned that the regular use of overdrafts could indicate serious problems with debt.
Tom Howard, a spokesperson for the Consumer Credit Counselling Service, explained that this form of finance can be useful in many cases.
But he added that becoming reliant on an overdraft is a sign of a "fairly serious problem".
Those who do struggle to stay within their means may wish to consider a debt management plan, as this could allow overdrafts and other forms of credit to be repaid at a more affordable level.
According to Mr Howard, alternative finance options could "well have lesser rates and be cheaper to borrow with" than overdrafts.
His comments came after research from price comparison site moneysupermarket.com found that the average interest rate for an overdraft has increased by 1.54 percentage points since February 2008, with the typical charge now standing at 11.6 per cent.
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