You are here: Home - Credit Cards & Loans -

Plastic providers cash in on ATM withdrawals

0
Written by:
22/07/2008

Credit card providers are cashing in on customers who use their plastic to take out cash from an ATM, according to MoneyExpert.

The independent financial comparison website says the average APR charged to customers who borrow cash and do not clear the balance has continually risen since November 2006 from 21% then to 24% in June 2007 and 25% now.

According to MoneyExpert, two out of three credit cards still charge more than the market average APR for taking out cash. The website says that 159 of the 246 cards on the market charge over 26%, with the most expensive charging a whopping 46%.

Credit card providers have seen profits squeezed by both a regulatory clampdown and the rate-tart phenomenon, with customers switching cards to chase 0% deals. With the cost of living continuing to rise, many people may be forced to turn to their credit card for cash in what could turn out to be an expensive last resort.

With millions of pounds being withdrawn from ATMs using credit cards each month, MoneyExpert warns customers to pay off the balance if at all possible or face hefty charges.

Sean Gardner, director of MoneyExpert, said: “Before you put your credit card in an ATM for cash, remember that it is one of the most expensive forms of borrowing around. Unless it’s absolutely necessary you should try to find another way to make a payment.

“Average APRs on cash withdrawals have always been hefty, but a steady 4% increase since November 2006 shows card firms are continuing to push up rates.

“Remember to clear your balance as soon as soon as you can so that any cash you have withdrawn doesn’t sit there accruing interest. If you can use a debit card or pay another way, it’s bound to be cheaper than your credit card.”

Related Posts

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

  • RT @HighStreetIFA: What would you do if you had an unexpected income shock? Could you cope financially? @YourMoneyUK report that over a thi…
  • What would you do if you had an unexpected income shock? Could you cope financially? @YourMoneyUK report that over… https://t.co/Qr7trOLdU5
  • 4 in 10 grandparents (5.8 million) give their children and grandchildren a helping hand, gifting an average of £1,4… https://t.co/oSyvS8KjIy
Read previous post:
Moneyfacts issues graduate advice

Searching for the best current account provider may be the last thing on many graduates’ minds when leaving university, but...

Close