Brits overdrawn
(20 July 2007)

Over 2.1 million Brits are permanently overdrawn and those unable to stay in the black on average go overdrawn on the 20th of the month, according to moneysupermarket.com.

The research revealed that over ten million Brits went overdrawn last year but only half cut back on spending or curb their lifestyle when their funds start running low.

Apparently, people from Lancashire go overdrawn two days before the rest of the country.

Kevin Mountford, head of current accounts at moneysupermarket.com, said: "It's no surprise so many people are permanently in the red - with interest rates having risen five times in the past year consumers are no doubt feeling the squeeze.

"People often dipping into their overdraft need to watch the effective annual rate (EAR) as some can be punitive and they may find they are better off spending on a zero per cent credit card in the short-term."

Mr Mountford explained that sometimes our current accounts do not help the situation and this is something that is being investigated by the Office of Fair Trading (OFT).

"Not only this, but your overdraft can be a murky place to reside - especially if you are close to the edge of the authorised limit. Unauthorised rates are often much higher and there are sharp penalty fees for breaching your agreement," he warned.