Big overdraft fees are about to become a thing of the past

The Competitions and Markets Authority (CMA) have announced plans to set a cap on how much banks can charge customers who go into or over their overdraft facility.

According to the CMA nearly 50% of bank account users go overdrawn – helping banks charge £1.2billion a year in fines.

The CMA have set out a list of plans to try and fix problems in the current account market, including forcing banks to send messages to customers as they approach or go into their overdraft, and further notification if they look like they’re going to exceed the limit – giving customers enough information so that they can take steps to sort it out before they get a fine.

The CMA believes that the measures will save consumers over £1billion over a five year period.

One of the best ways to deal with your overdraft is to move banks – as a new bank will often allow you to pay off your debt without adding interest – check out the comparison page for current accounts here. You could also consider a personal loan if the interest rate is lower than the bank fees for being in your overdraft – but remember these options don’t get rid of your debt, they could just help you manage it better and get out of it faster.

What else would you like to see the CMA do to help you get out of current account debt? Let us know in the comments below or on our Facebook page.