Welcome!

News Feed Item

Plan Ahead to Keep Down the Cost of Christmas

LONDON, UNITED KINGDOM -- (Marketwire) -- 12/13/12 -- With the festive season upon us and predictions of a bumper spend on loved ones(i), first direct suggests that customers who plan to use their overdraft to cover any additional spending, review their overdraft limit so it will cover their extra seasonal purchases.

Over a third of Brits have used their overdraft in the past 12 months(i) as it is a very cost effective way to borrow in the short term and this is set to rise as the Christmas cheer gets under way. However shoppers need to understand the cost of their borrowing. Even though first direct current account overdraft interest costs have stayed the same, on average the annual cost of being overdrawn by GBP 500 for 7 days every month has almost doubled in 5 years from GBP 18.94 in 2007 to GBP 40.08 in 2012. This for many would be an unnecessary extra cost to the festive bill.

Andy Forbes, Head of Products at first direct commented, 'An overdraft is a convenient way to borrow for short periods without having to arrange a specific loan. Arranging an adequate limit on your account means you know you have the flexibility to spend up to that amount.

'With our 1st Account there is no cost for setting up or changing your limit so it makes sense to request a limit appropriate to your needs. At first direct there is no interest charged if you keep your overdraft balance under GBP 250 and higher balances are charged at a competitive 15.9% EAR.'

Andrew Hagger from Moneycomms added, 'If you ask people how much it would cost them to use a GBP 500 authorised overdraft facility with their bank, many wouldn't have a clue. Unfortunately it's not until interest charges and fees are debited to their accounts that some people realise just how expensive it can be.

'Although daily fees may be seen as more transparent and easier to calculate, it can prove to be a very expensive way of borrowing, particularly for smaller sums. A bit of planning can make an overdraft a sensible way to manage the costs of the festive period.'


                           Sept 2007                  Annual cost of        
                                                      authorised GBP 500    
                                                      overdrawn balance for 
                                                      7 days every month    
Abbey                      16.9% EAR                  GBP 19.45             
Bank of Scotland           18.9% EAR                  GBP 21.75             
Barclays (Bank                                                              
Account)                   15.6% EAR                  GBP 17.95             
Clydesdale Bank                                                             
(Current account plus)     9.6% EAR                   GBP 11.05             
Co-operative Bank          19.5% EAR + GBP 15 per                           
(current)                  annum                      GBP 37.44             
First Direct               10.9% EAR                  GBP 12.54             
Halifax (Current)          18.9% EAR                  GBP 21.75             
HSBC bank Account          18.8% EAR                  GBP 21.63             
Lloyds TSB Classic         19.3% EAR                  GBP 22.21             
Nationwide Flex            7.75% EAR                  GBP 8.92              
NatWest - Current Plus     19.9% EAR                  GBP 22.90             
RBS - interest paying                                                       
current account            19.9% EAR                  GBP 22.90             
Smile                      11.9% EAR                  GBP 13.69             
Yorkshire bank -           9.6% EAR                   GBP 11.05             
Current Account Plus                                                        
Average 14 Accounts                                   GBP 18.94 per year    

                           Nov 2012                   Annual cost of        
                                                      authorised GBP 500    
                                                      overdrawn balance for 
                                                      7 days every month    
Santander - Everyday       GBP 1 per day (max GBP                           
Current                    20 per month)              GBP 84.00             
Bank of Scotland -                                    GBP 93.80 (first GBP  
classic                    19.94% + GBP 6 pm          25 interest free)     
Barclays (Bank                                                              
Account)                   19.3% EAR                  GBP 22.21             
Clydesdale Bank                                                             
(Current account plus)     18.85% EAR                 GBP 21.69             
Co-operative Bank          18.9% EAR + GBP 20 per     GBP 41.75             
(current)                  annum                                            
First Direct               15.9% EAR                  GBP 9.15 (first GBP   
                                                      250 interest free)    
Halifax (Current)          GBP 1 per day              GBP 84.00             
HSBC bank Account          19.9% EAR                  GBP 22.90             
Lloyds TSB Classic         19.94% EAR + GBP 6 pm      GBP 93.80 (first GBP  
                                                      25 interest free)     
Nationwide Flex            18.9% EAR                  GBP 21.75             
NatWest - select           19.89% EAR                 GBP 22.89             
RBS - Select               19.89% AER                 GBP 22.89             
Smile - Current            18.9% EAR                  GBP 21.75             
Yorkshire bank -                                                            
Current Account Plus       18.85% EAR                 GBP 21.69             
Average 14 Accounts                                   GBP 41.73 per year    

Research by Andrew Hagger - MoneyComms.co.uk -22 November 2012

(i)Research by Moneysupermarket

Information about first direct:


--  Winner of Which? Best Financial Provider and Moneywise Most Trusted
    Financial Provider 3 years running 
--  Top financial institution in the Which? Customer Satisfaction Survey
    with an all-time high of 93% 
--  Ranked first in the Retail Banking Satisfaction Study by JD Power &
    Associates for two years running

first direct provides both telephone banking and online banking services to its 1.2m customers. It offers a full range of personal banking products including its award winning Current Account and offset mortgages.

For the latest updates, visit the first direct Newsroom or follow us on Twitter.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, will discuss using predictive analytics to ...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
The principles behind DevOps are not new - for decades people have been automating system administration and decreasing the time to deploy apps and perform other management tasks. However, only recently did we see the tools and the will necessary to share the benefits and power of automation with a wider circle of people. In his session at DevOps Summit, Bernard Sanders, Chief Technology Officer at CloudBolt Software, explored the latest tools including Puppet, Chef, Docker, and CMPs needed to...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that VAI, a leading ERP software provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. VAI (Vormittag Associates, Inc.) is a leading independent mid-market ERP software developer renowned for its flexible solutions and ability to automate critical business functions for the distribution, manufacturing, specialty retail and service sectors. An IBM Premier Business Part...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...