The interest rates in Germany continue to rise. As an analysis shows, large financial institutions in particular charge significantly more for the overdraft facility than the average. Consumer advocates are alarmed.
Banks and savings banks in Germany are currently raising the interest rates for overdrafts and overdrafts significantly. According to an evaluation by the financial portal biallo.de, 264 of the 1167 financial institutions examined recently increased their overdraft interest. The average overdraft rate is now 10.07 percent; a year ago it was 9.99 percent. The interest for the overdraft of the overdraft facility is 12.39 percent, after 12.29 percent a year ago. “You have to remember that the average rate was already very high and unjustifiable given the low interest rates,” says Horst Biallo, founder of the finance portal. The fact that banks are now taking advantage of the situation to set the previously excessively high interest rates even higher is “a strong point” for him.
Because the evaluation shows that large institutes in particular, such as Deutsche Bank with 11.15 percent and Targobank with 13.12 percent, are currently demanding significantly more. The leader is the VR-Bank Landsberg-Ammersee with 14.29 percent. If a customer exceeds the overdraft facility, 19.29 percent overdraft interest is due.
Consumer advocates expect that many people will get into financial difficulties as a result. “Especially in the current situation with the enormously increasing prices, even higher interest rates are very problematic,” says Andrea Heyer from the consumer center in Saxony. She assumes that more and more bank customers will soon be forced to resort to overdraft facilities. “It doesn’t just affect the poor, but increasingly broad sections of the population,” she says. For the consumer advocate, it is therefore clear: “A statutory overdraft interest rate cap must quickly be put back on the agenda.”
There have already been advances in this direction in recent years, they came mainly from the Greens, and there was also approval from the ranks of the SPD. In the grand coalition, the CDU was against the move, now in the traffic light government, the FDP is reserved. “Basically, we Greens think it is necessary to cap overdraft interest by law,” says Stefan Schmidt, member of the Bundestag and Green finance politician. According to surveys by the DIW economic research institute, almost 40 percent of people in Germany have no significant reserves, and the number of negative reports from the Schufa debt information service has recently increased by 20 percent compared to the previous year.
“So people are increasingly having payment difficulties,” says Schmidt. An interest cap should protect them from escalating costs. Schmidt suggests that the Federal Ministry of Finance determine a maximum interest rate. “I can imagine that an interest rate of six to seven percentage points above the current reference rate would meet these criteria and be appropriate,” he says. Such a reference interest rate could be the Euribor, which is currently around 2.7 percent for a term of one year. The interest rate would therefore be capped at just under ten percent.
Sascha Straub from the Bavarian Consumer Advice Center sees overdraft interest rates as a “fire-risk accelerator of over-indebtedness”. The overdraft facility is the most readily available credit and at the same time the worst. If you’re not careful, you’ll quickly be in the red by 10,000 euros, and with an interest rate of 15 percent, you’ll end up with 1,500 euros a year. Straub expects that “the rally in rate hikes is yet to come.” This is another reason why the demand for an interest rate cap is “more important than ever” for him. Politicians must now drive the project forward in order to avoid even more social hardship in the coming months.