Monday, 20 July 2009


I've just received a letter from my bank confirming that my overdraft limit is £1,500 with a current annuak interest rate of 18.29% and a current Effective Annual Rate of 19.9%.

Its nice that they let me know these things, and I think its nice that they get to chose the rate of interest they charge, HSBC are great.

I file away the letter, and stumble upon the equivalent letter from last year which has the same overdraft limit, but a year ago the interest rates charged were 17.35% and 18.8%

So its gone up by just over 1%.

Which I find is a little odd. The Bank of England's base rate is currently 0.5% and a year ago it was 5.0%

So how come the base rate has gone down 4.5%, but what I'm paying has gone up?

Does not compute.

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