MILLIONS of Halifax, Bank of Scotland and Lloyds Bank customers might be forced further in to the red as a result of massive shake-up to overdraft charges.
Those with the biggest arranged overdrafts who're constantly indebted would be the worst hit through the overhaul.
Customers who hardly ever use their back-up with the bank will be better off.
At present, customers are charged a lb6 fee plus interest, based on their account.
From November, customers will be charged a single rate of 1p per day for every lb7 of overdraft use.
Instead of taking the money after the month, the banks will charge a daily fee.
It will no longer charge customers when they review their arranged overdraft limit, although customers will be likely to repay anything they owe as could be expected.
For example, which means that a customer who goes overdrawn by lb100 inside their planned allowance for 10 days, will pay lb1.40, whereas previously they would have paid lb6.38.
But for any Lloyds Bank customer who's in their overdraft by lb2,000 for more 12 days a month pays lb34.29 – an increase of lb16.82 per month or lb201.84 each year.
While a Halifax Reward customer will pay lb34.29 – an increase of lb10.29 per month or lb123.48 per year.
Lloyds Banking group state that 90 percent of customers will see no change or will be better off which around half of customers come with an average overdraft of lb450.
Customers is going to be contacted by letter and email concerning the changes.
Those who definitely are negatively impacted will receive an invite for extra advice, including if they'd like to take out a personal loan to help pay off the debt.
Those with the biggest debts, who are consistently within their overdraft will be the worst hit.
Savings expert, Andrew Hagger, founder of Moneycomms.co.uk, said: “This is a reasonably radical move by Lloyds Banking Group (LBG).
"The effective rate of interest charged will jump up from around 19 per cent to over 50 per cent so for customers can not clear a stubborn overdraft balance it's likely to be not even close to simple to make a decent inroad in to the amount owed.
For customers struggling to clear a stubborn overdraft balance it's going to be not even close to easy to create a decent inroad in to the amount owed
Andrew Hagger, Moneycomms.co.uk
"If your overdraft is solid and you're getting nowhere fast it might be worth looking at a 0 percent money transfer charge card in the likes of MBNA or Virgin Money – it's much more cost effective especially if you repay the total amount before the 0 per cent term ends."