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HSBC has signalled the end of easy credit by announcing a clampdown on customers
who regularly go overdrawn on their current accounts.
The bank is tightening up its rules on overdrafts, reining in customers it
believes may be borrowing beyond their means.
It is introducing an annual review of all overdrafts and admits this would mean
some consumers facing a cut in their overdraft limit.
For many consumers, their overdraft has in effect become a rolling personal
loan, with estimates suggesting that between 20% and 30% of bank customers
regularly use their overdraft facility.
The bank has started writing to its 8 million current account customers about
the changes, which will take effect on December 1.
After that date, overdrafts will be subject to annual review, with the bank
contacting customers to check whether they still need one or whether they would
be better off switching to another borrowing product such as a personal loan.
Some will see their limits slashed while others will see them increased.
Joe Garner, head of UK personal financial services at HSBC denied the changes
were designed to push people into products that were more profitable for the
bank.
"This move will not improve our income", he insisted.
Source:
Getting Paid
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