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"66 percent cash withdrawal fee hike from Egg"

By admin | May 21st, 2009 | Cash Back & Rewards, Credit Cards

Internet banking giant Egg has once again found itself at the centre of controversy over its credit card division, after it was revealed that the lender has hiked its cash withdrawal fees on credit cards by a whopping 66 percent recently.

With the base interest rate plummeting and credit card companies under pressure to keep APRs down, many credit card providers have been looking at other ways in which to get more money off consumers, and it appears that applying significant hikes to fees such as these is one of these ways.

From 28th May the cash withdrawal fee for Egg credit card users will increase from a minimum of £3 to a minimum of £5 or 3 percent of the cash amount depending on which is the highest.

Egg has said that the move has been put into place to try and stop cardholders from withdrawing small amounts on their credit cards on a regular basis, as this can indicate financial difficulty. Cardholders with Egg are now being warned to exercise caution before using their cards to withdraw cash, as the fees could be crippling.

One industry official said: ‘The rationale for this change is reasonable. However, we strongly advise customers not to use this facility on any credit card unless they are really desperate for the cash. Interest is applied to credit card cash withdrawals from the day they are made and the APR is generally far higher than that applied to purchases.’

Every year consumers in the UK are making a total of around thirty eight million cash withdrawals on credit cards, and are paying tens of millions in fees for the privilege of doing this. These hikes mean these customers will now end up paying even more, and with Egg having increased their fees by such a large amount it is likely that other credit card providers will follow suit.

Tags: egg credit card, credit card charges, cash advance fee

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