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18 December 2019, 12:55
Overdraft rules have changed today (Wednesday 18 December) - and banks will no longer be able to call them 'available funds'.
The new rules that ban banks from referring to overdrafts as 'available funds' come in place today - meaning millions of Brits' bank balances may look different.
The changes come after city regulator the FCA cracked down on a 'dysfunctional market' that confused many users about how much money was in their account - and how much they were actually borrowing.
Starting from today, your "available balance" or "available funds" will not include your overdraft credit - so it will be clear that it isn't your own money.
In addition, fixed fees for borrowing on overdrafts will be banned.
New rules on interest payments will also be introduced on 6 April, and banks will be prevented from charging higher prices for unarranged overdrafts than they do for arranged.
Banks and Building societies will need to advertise their overdraft prices, so that customers can compare them with other places on the market.
The FCA has predicted that the cost of borrowing £100 through unarranged overdrafts will fall from around £5 a day to less than 10p.