Using a credit card to withdraw money from cash machines could accrue debt, new analysis from Money Expert has revealed.
The average annual percentage rate (APR) imposed by credit card companies for not clearing balances built up by ATM use now stands at 25.3 per cent – a rise from 21.27 per cent since November 2006.
The most expensive rate was 46.19 per cent, with nearly two-thirds of credit cards charging over the market average APR, the financial comparison website said.
Sean Gardner, director of Money Expert, warned people may find themselves in debt by using their cards this way.
“Before you put your credit card in an ATM for cash, remember that it is one of the most expensive forms of borrowing around,” he said, adding it should only be done if “absolutely necessary”.
It has become “an expensive last resort” for many people who are struggling with debt management issues, the company said.
This week Moneyfacts recommended graduates pay off credit card debt as soon as possible and look for cards with a zero per cent balance transfer.
By Morwenna Kearns