Credit card cash withdrawals 'could crank up debt'
02 October 2007
Credit cardholders in the UK are paying huge premiums for taking out cash from ATMs, new research from Moneysupermarket.com claims.
Consumers are paying up to 27 pence in fees and interest for every pound withdrawn using cash machines, the report states.
Indeed, just one £20 cash withdrawal per month can rack up fees and interest of £65 over the year, even when the monthly balance is paid off, the firm explained.
Rob Kenley, head of credit cards at moneysupermarket.com, said: "People should think very carefully before using their credit card to take out cash. At a cost of up to 27 pence for every pound taken out, this is an exceptionally expensive way to spend.
"The real killer is the cash withdrawal fee of between £2.50 and £5 on most cards, other than Egg Money which does not charge any cash withdrawal fees."
He added: "Wherever possible you should only withdraw cash from your current account, but we realise sometimes people face unexpected emergencies. If you run out of money but still need to make purchases, then using a credit card with 0 per cent on purchases is much more cost effective."
