Credit card users in the UK have been warned that they could be adding to their debt management difficulties by repeatedly making cash withdrawals on these plastic products.
According to Moneysupermarket.com, many thousands of people around the country are “paying a huge premium” for using their credit cards to take out cash.
Indeed, the financial comparison company suggests that the typical credit card firm would charge close to 15 per cent on each withdrawal if a consumer took out £20 once a month over the course of a single year.
“People should think very carefully before using their credit card to take out cash. At a cost of up to 27 pence for every pound taken out, this is an exceptionally expensive way to spend,” said Rob Kenley, head of credit cards at Moneysupermarket.com.
“Wherever possible you should only withdraw cash from your current account, but we realise sometimes people face unexpected emergencies.”
Meanwhile, record numbers of people are now approaching Citizens Advice about debt, according to the organisation’s latest figures.