Financial expert Martin Lewis has urged people to be prepare for major changes on their overdrafts.
The Financial Conduct Authority has introduced new rules to make overdrafts more transparent - focusing on an annual interest rate instead of daily charges.
While the end of daily fees may sound like good news, MoneySavingExpert.Com founder Lewis said it could be "an eye opener" for many.
Speaking on TV programme This Morning, he said: "Back in 2005, banks would charge £35 a pop for going overdrawn. It would be £35 per transaction - ie if you made seven transactions, you'd be charged seven times.
"The system was designed to entrap customers. Last July, the regulator said that from April 2020, banks will no longer be able to charge you a fine for going over your overdraft limit.
"That means that while they can still charge you what it costs them, they won't be able to impose daily penalty charges."
However, from April, all banks will have to charge interest rates for their overdrafts instead.
First Direct, HSBC and M&S are all changing on March 14 - but these lenders already had percentage rates, so they're essentially using the changes to up how much they can earn from customers.
"Yes, this makes it easier to compare what's on the market," Martin explained.
"But the changes were introduced to make the market more competitive - which hasn't worked. They're all charging the same at 39.9%.
"The straight fact is, if you're overdrawn in future, you're going to pay 40% interest on your overdraft."
Martin urged viewers to tackle their overdraft as much as they can before the change occurs in April.
When a member of the public asked advice on what he should do with his overdraft, Martin suggested to him to pay off the debt, he said: “Take your savings and pay it off.”
He also told the show: "The problem with overdrafts is that they’re a stealth debt, you don’t apply for them you just slip into them,” Martin explained.
