With one hand they giveth….

It appears I was right to be suspicious of the new Barclays overdraft charges and ‘personal reserve’ system.

On further inspection of the small print, it’s only a handful of account holders that are likely to benefit from these changes. Most Barclays customers who consistently breach their overdraft limit will be in approximately the same boat at the end of each month balance-wise, give or take a pound or two.

How so? Well, here comes the science:

• The bank has reduced it’s fee for going overdrawn without prior agreement from £35 to £22

• The agreed overdraft interest rate has risen from 15.5% to 18%, offsetting any gains from the reduced fee.

• Should you borrow beyond your agreed overdraft, Barclays will allow you a ‘personal reserve’, or buffer. This buffer, which is advertised as being anything up to £1500, will in fact be £250 on average. It will cost you £22 to use this buffer.

• Once you start borrowing from the personal reserve, you will not be charged for any transactions made for five days. Once the five days have elapsed, you will be charged £8 per transaction.

• If you exceed the personal reserve, you will be charged £8 per transaction.

• On top of this, credit interest has been reduced to 0%

Baring in mind most account holders who borrow beyond their overdraft are caught in a monthly cycle, the charges incurred month on month with the new system are likely to mirror those incurred with the existing system.

The marked difference between Barclays new and existing accounts is the terminology behind them. The terms of these new accounts are entangled and complex, designed deliberately to confuse the account holders.

On the plus side, nobody will be worse off. However, there’s very little to gain for those with money troubles, and this move by banks can be viewed as a distinct sidestep around the ‘unfair fees’ problem.

‘Barclays slash overdraft fees’? Don’t believe the hype.