BANK customers who slip into overdrafts are charged nearly eight times more than if they took out a payday loan.
High street banks demand up to £180 for an unarranged £100 overdraft for 30 days.
But Which? magazine points out payday loan companies such as Wonga are barred from charging more than £24 for the same amount.
The cap was introduced two years ago by watchdog the Financial Conduct Authority after fury over sky-high interest rates.
But there is no similar limit on what banks can charge for unarranged overdrafts.
They can also bill customers based on the calendar month, or “charging period”.
So if a 30-day overdraft stretches from the middle of one month to the middle of the next, they can demand the monthly fee twice.
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In the worst case, NatWest customers borrowing £100 on an unarranged overdraft would be charged £90 — or £180 if the 30 days covered two charging periods.
Vickie Sheriff, of Which?, said: “If banks can continue to set their own charges, then consumers will continue to be hit by exorbitant fees.”
Which? compared free current accounts at seven banks and the charge for an unarranged overdraft if the customer had already used a £1,000 arranged overdraft.
The British Bankers’ Association said: “We would always encourage customers who think they might need to borrow money to speak to their bank first to keep borrowing costs down.”
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