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People 'should tell banks if they are about to overdraw'

26 Jun 2009

People have been advised to inform their banks in advance if they are about to become overdrawn.

In an article on saving money in the recession, the Mirror explained to readers that going overdrawn without notice could mean having to pay twice as much interest as a personal loan would cost.

There may even be other fees imposed as well. People were recently warned by the Office of Fair Trading against "debt sale" scams in which companies make misleading claims about buying off debt and taking over liability.

Derek Oakley of DebtFreeDirect.co.uk said that while this cannot be done without the lender's permission, debt management solutions do exist.

Other tips given to people included destroying store loyalty cards, which could hit consumers with interest rates as high as 30 per cent, as well as getting rid of extended warranties.

Electrical goods are usually high quality and repairs are often cheaper than buying a warranty. Another piece of advice was to use online comparison websites to find better deals for products and services as well as utilities.

People were encouraged to switch energy suppliers if they could find a more attractive option elsewhere.

Written By: Richard Errington

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