Millions of customers with NatWest and Royal Bank of Scotland (RBS) are facing new fees of up to £72 a year for dipping more than £10 into their arranged overdrafts.
From 12 July, current account customers with the state-backed bank will be charged a £6-a-month “arranged overdraft usage fee” when they go over £10 into the red – on top of existing annual interest rates of 19.89 per cent.
The rule changes mean that the interest-free “buffer” customers have on arranged overdrafts will be cut from its current level of £100 to £10.
The bank said that the “cost neutral” changes will help it to ease the burden on those who are drowning in debt by lowering the charges it places on people who plunder their unarranged overdrafts.
An RBS and NatWest spokeswoman said: “The new fee will help to finance a very big reduction in costs for those customers who are struggling.”
The maximum monthly fee on a customer’s unarranged overdraft will be halved from £186 to £90.
The plans emerged as financial information website Moneyfacts warned that arranged overdrafts are becoming more expensive across the market and typical rates now stand at 15.99 per cent.