Digital Banks Grapple with Still Planned Overdraft Changes in UK

The UK’s Financial Conduct Authority plans to move forward with overdraft changes in April which would allow for banks to charge up to a 39.9 percent effective annual rate or EAR; AltFi takes a look at what some of the leading digital banks are doing to prepare for the changes; Starling Bank plans to offer 15 percent, 25 percent and 35 percent interest on arranged overdrafts for personal current accounts where credit scores will determine where you fit; Monzo plans to offer 19 percent, 29 percent or 39 percent EAR depending on their credit scores; some of the other leading digital banks in Europe do not yet offer overdrafts and so the changes would not apply; the FCA hopes the changes will simplify customers’ understanding of how much overdrafts cost. Altfi

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