Barclays has been forced to issue a warning following customer backlash over a letter regarding account changes. A disgruntled customer reached out through social media expressing their frustration: “Despite never exceeding our overdraft limit, never being persistently overdrawn, today you significantly reduce our overdraft limit.”
They highlighted the move’s poor timing, saying: “In what is possibly the most stressful financial month. Oh, and sending a text out after your lines have closed? Cynical move.”
Barclays responded by explaining the necessity for yearly reviews on overdraft limits to assess their appropriateness.
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The bank also informed the customer of likely correspondence in the form of a letter: “You should also receive a letter to advise of the outcome of the review, but we do sometimes send a text message to let customers know in advance.”
It was clarified that letters are normally viewable within the app or online banking under statements and documents, appearing two working days after issuance. Barclays apologised for any stress caused and referred the customer to mental health support resources.
Customers using their arranged overdrafts are reminded that the current interest rate charged by Barclays stands at 35 percent for such use, applicable up to the agreed limit.
For instance, the interest cost of borrowing £500 would be £2.88 over seven days, £12.45 for 30 days and £25.21 for 60 days. These charges apply daily when you’re overdrawn and are billed to your account monthly.
Some overdrafts are set up with an interest-free amount, meaning interest is only charged on amounts exceeding this limit. If your arranged overdraft includes an interest-free amount, interest is calculated on the overdraft amount used above this free limit.
If you don’t have an arranged overdraft but spend more than what’s in your current account, there’s no interest to pay. However, customers should be aware that having an overdraft could impact their credit score.