Let’s go crazy….

As I’m sure Olivia Buck will be delighted to hear, Barclays today announced a relaxation of their unauthorised borrowing policy:

Barclays First to Reduce Overdraft Fees

Effectively, Barclays are prepared to supply you with a £1500 buffer beyond your agreed overdraft (if you have one), which they will charge you £22 to use, and allow you five days grace to clear. This buffer will be known as a ‘personal reserve’.

Certainly an improvement on the old ‘go one penny over the line and we’ll ruin your life’ regime.

However, I have a concern.

What with so many consumers forced to cut up credit cards, swap Liberty for Lidl and turn down their thermostats due to the precarious economical climate, won’t people view this personal reserve as free credit?

There’s certainly a psychological argument. Having been deprived of disposable income for some time, there will surely be an urge within a number of these new Barclays customers to go on the mother of all spending sprees.

The net result or consequences of this spending would be akin to loading up a credit card. Another possible avenue to help get you through these turbulent times blocked off by one’s own irrational need to consume.

So, will these measures work as a handy parachute to those who perennially slip into the red, or will they just add to the economical negativity blighting this country (and the rest of the world) in the long term?