Consumers 'should be more savvy when borrowing'

Consumers need to be more savvy when it comes to choosing overdrafts, in order to avoid being overcharged, according to moneysupermarket.com.

The research reveals that choosing the wrong account could cost consumers around £300 a year in charges.

With overdrafts becoming increasingly confusing, consumers are looking for alternative ways to get credit.

Kevin Mountford, head of banking at moneysupermarket.com, said that consumers should turn to the most appropriate credit providers for their borrowing needs.

He said: "The key is choosing the right product for their borrowing needs."

The Lending Standards Board - an independent watchdog - has recently announced a new Lending Code which will give consumers greater protection when borrowing, by monitoring the actions of lenders.