Barclays alert as cash limit rule means ‘we can refuse payments’
Barclays has issued an update on its cash limit policies after a customer shared their confusion when they realised a £200 feature was axed from their account. Voicing their frustration to the bank over X, the customer said: "Barclays are removing my £200 overdraft because I’ve not used it for 90 days and I would get it today if I asked for it.
"£10k in my bank but when I had nothing they gave me an overdraft they’ve earned plenty of interest on." In guidance on its website, Barclays urges customers to maintain adequate funds in their accounts to meet payments without going over their agreed overdraft limit.
The advice states: "If you want to make a payment that would take you over your arranged overdraft limit, we can refuse to make the payment." Responding to the customer's concerns, Barclays expressed: "As a responsible lender, we constantly review accounts and take into consideration any other lending people may have. As you've mentioned, if an overdraft isn't being used, we'll remove due to it no longer being needed."
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How do overdrafts with Barclays work?
Arranged overdrafts with Barclays incur an annual interest rate of 35 percent.
An arranged overdraft is when a customer and the bank agree on an overdraft limit, allowing the customer to borrow money up to this amount with daily interest accruing on the overdraft balance. There might be an interest-free portion within this agreed limit. Amounts over this limit won't incur interest but this may affect your credit score negatively.
Conversely, an unarranged overdraft happens when a customer exceeds their available balance without a prior agreement with Barclays. Such overdrafts will not attract interest.
Barclays does offer some flexibility; if customers go into an overdraft by £15 or less, they are not charged interest. Clients who wish to reduce their arranged overdraft can adjust it to a lower amount consistent with or below their current overdraft balance.
If you opt to entirely remove your overdraft limit, any owed sums must be repaid. You can manage your overdraft limit reduction or cancellation via the app, online, by visiting a branch, or by calling Barclays at 0345 734 5345.
Customers may also want to note that when arranging a payment, you must have enough funds in your account by 3pm on the day a payment is due. Barclays outlines the policy as follows: "The money needs to be immediately available to use, so you can transfer money from another account using mobile, online, telephone banking, or you can pay cash over the counter at a branch. If there isn’t enough money in your account, we will always try and return the payment to help you avoid going into an unarranged overdraft."
Barclays has an overdraft calculator tool you can use to work out how much the charges would be if you went into an overdraft.