Credit card cash charge 'costly'

Credit card customers pulling out the plastic to withdraw cash from ATM’s are paying up to 46.19 per cent on their withdrawal, claims comparison site MoneyExpert.

According to research, based on data from a Defaqto database, suggests that credit card providers are charging their customers on average two per cent more than they were at the end of last year for customers who use an ATM and don’t clear the balance.

The average APR for uncleared cash withdrawals has risen from 21.27 per cent in November 2006 to 23.48, with the highest APR currently at 46.19 per cent.

As well as charging higher rates of interest on cash balances, all but three credit card companies charge a withdrawing fee on all their products.

Egg Money, Abbey and the Co-operative Bankare the only three to offer at least one product without a cash withdrawal fee.

Although 85 per cent of adults hold debit cards, which grant customers access to funds in their current account or to an overdraft, Britons withdraw around £750 million a month from ATMs on their credit card.

Withdrawals from debit cards are free and even going into an agreed overdraft limit will incur interest rates, which at 12.3 per cent are almost half what credit card providers charge.