Using a credit card to gain a cash advance should be an “absolute no no”, it has been suggested.
According to Moneynet.co.uk the cost of taking out extra cash via a credit card has risen by around 5.5 per cent over the course of the past two years and should be avoided.
By using a cash advance facility, consumers are running the risk of adding significantly to the scale of their credit card debt and finding themselves in an unmanageable financial situation.
“It’s not surprising to see lenders increasing rates in this area as taking cash on your credit card is a sign that you’re potentially facing financial difficulties,” said Andrew Hagger from Moneynet.co.uk
“Unfortunately some people will be getting to the stage where they can’t make ends meet and will pay whatever interest and charges it takes.”
According to Credit Action, consumers in the UK pay a total of almost £258 million every day to service the interest on their collective debt management burden.
By Giles Stevenson