Related Credit Card Article

"Consumers pay through the nose for cash withdrawals on credit cards"

By admin | September 24th, 2008 | Cash Back & Rewards, Credit Cards

With credit conditions still tight and household finances stretched to their limits as a result of rising living costs, higher food prices, soaring petrol prices, and rocketing bills, many people have found that they do not have enough money to make ends meet each month. As a result of this many have found that they are becoming more reliant on their credit cards both to make purchases and to withdraw cash.

It is well known that it can cost serious money to use credit cards to make cash withdrawals, and over recent months credit card firms have been playing on the difficulties that cardholders have been experiencing by encouraging them to take cash out on their cards through advertisement and flyers.

However, at the same time many have hiked up the cost of taking out money on a credit card, which means that cash strapped consumers having to turn to their credit cards to get money are now having to pay even more.

One industry official warned consumers to bear the cost of cash withdrawals on credit cards in mind, stating: ‘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.’

He went on to state: ‘Remember to clear your balance as soon as soon as you can so that any cash you have withdrawn doesn’t sit there accruing interest.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.’

Tags: cash advance, Credit Cards

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