High interest rates

Bank overdrafts: “More fairness for bank customers”

If the current account is overdrawn, it can get really expensive

(Bild: stock.adobe.com)

Deputy Governor Astrid Eisenkopf (SPÖ) has identified an imbalance between savings and credit interest rates and is therefore calling for government intervention. At the same time, she is also calling for more transparency in collection fees.

Due to inflation, many people are dependent on overdrafts and short-term consumer credit to finance their daily lives. Vice Provincial Director Eisenkopf also sees this development confirmed by the increasing demand for debt advice in Burgenland.

Expensive form of financing
If the account is overdrawn, it becomes really expensive for bank customers. The average interest rate is between 7 and 14 percent. For current accounts, the interest rates for overdrafts are often in the double-digit range, while an average of only 0.01 percent is usually paid on the credit balance, criticizes Eisenkopf. The debt advice service therefore advises bank customers to inform themselves well about the amount of the fees. For larger expenses, an installment or call-off loan with lower interest rates is recommended.

We need to reduce the interest rate gap between the incredibly high debit interest rates and low credit interest rates. The federal government must finally intervene here.

Landeshauptmannstellvertreterin Astrid Eisenkopf (SPÖ)

If an account is overdrawn, the running costs can usually be covered, but money is often tight again the next month. "This is a constant downward spiral of debt," says Eisenkopf. The interest rate for overdrafts is far too high compared to consumer loans. "I'm calling for government intervention here," says the deputy head of state. The aim should be an interest rate of 5 percent for interest on overdrafts. The federal government must listen to people's concerns here. In order to increase the pressure, a resolution was also passed in the state parliament.

"More transparency for debt collection fees too"
At the same time, Eisenkopf is also concerned about debt collection fees. The maximum rates are regulated in a federal ordinance from 2005. "More transparency and legal certainty are needed here for creditors and debtors," says the deputy head of state. An evaluation is urgently needed.