Bank charges add up pretty quickly, a few missed payments or drifting over your over draft limit can soon result in paying a small fortune. This can quickly become a regular occurrence too, getting caught in a bank charges trap where you end up working simply to clear existing and ever growing debt. But taking a few simple steps can stop you wasting your hard earned money by making for the bank and nothing for you.

Where Do Bank Charges Come From?

Banks will charge for all sorts’ reasons, late payments, penalties, interest on late payments, bounced cheques and administration fees (for standard letters they send about the money you owe). Interest on an agreed overdraft is bad enough but the biggest bank charge that causes problems for thousands of us every month is excess overdraft charges. Millions of hard working Brits who struggle to keep on top of bills and cover daily costs slip beyond their overdraft limit before payday.

How Much are Bank Charges?

The amount charged varies between lenders, but can average around £25 to £35 per charge. Banks will also charge customers that do not clear these charges within a set number of days, for many this can be around three days. No wonder that bank charges accumulate very fast, cost us hundreds of pounds every month and become a way of life for so many people.

How to Avoid Bank Charges

Of course, the best way of avoiding bank charges is by making sure you do not miss any repayments, standing orders, direct debits or exceed an overdraft. This is easy to say but can be hard to achieve. If you’re running out of money when payments are due and direct debits will be flying out of your account a fast payday loan could cover all your bank bills and direct payments. Quick loans from Payday Direct can be in your bank within 24 hours and you pay a flat rate with no hidden costs. You simply pay back £25 for every £100 you borrow: • A loan of £80 will cost you £100 • A loan of £160 will cost you £200 • A loan of £200 will cost you £250 Simply payback what you borrow on your payday and you could stop the bank charge trap. Hidden Credit Card Charges Credit card companies have long been masters of hidden charges that can easily add up, but can be very difficult to avoid. Payment Allocation One of the cheekiest ways credit card companies get extra charges out of their customers is via the system they use to decide which bits of your credit card balance to pay off first, called 'Allocation of Payments'. Basically, it usually means that the stuff they make most money on is paid off last, and the stuff they make little to no money on is paid off first. If you only make the minimum payment, this may take years, meaning you're paying interest on the £100 for all that time.