Overdraft opt out 'a good idea'

By Sarah Engle, Thu 18 Mar 2010 - Published in Banking

Allowing people to opt out of overdraft facilities could help them with their financial management, it has been suggested.

This week, the Office of Fair Trading said it expected people would be able to choose to not have access to unarranged overdraft facilities, thus avoiding the charges linked to them, within the next two years.

Andrew Hagger, spokesperson for Moneynet.co.uk, said the move would be a "good idea", as some people often dip into an authorised overdraft without realising it.

He added that if people do not regularly check their balance, it is easy for them to become overdrawn by several hundred pounds and face the bank charges which are linked to this.

"If people are a little bit wary of that situation then I think it is good for them to be able to have an option whereby they don't actually have the ability to go into their overdraft," the representative commented.

However, Mr Hagger recommended people get into the habit of knowing exactly how much is in their account, as they could find their card is rejected if they are unable to go past their overdraft limit.

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