Confused British credit card holders seem to be unaware about the true costs of making a credit card withdrawal, meaning that we are paying £161 million on interest for these transactions alone.
uSwitch.com report that many may need some form of debt help, due to withdrawing cash to pay for costs such as mortgages, loans and household bills, while over 700,000 make cash withdrawals so they can afford to make their credit card payments.
69% of consumers are unaware of the high interest rate and charges being added when making these withdrawals. The average annual percentage rate now stands at 29.97%, up from 21.22% in 2005. This rise in interest rate should be cause for alarm, especially as 16% of the population are getting cash through credit card withdrawal.
Personal finance manager at uSwitch.com, Louise Bond, commented:”People who use a credit card to withdraw cash may already be struggling under the burden of debt and are forced to resort to this method of borrowing to make ends meet.”