Credit card charges reviewed

04/06/2007

Card holders who use their credit cards to withdraw cash have been told that credit card companies are making maximum profits when a card holder uses the ATM machine.

Recent figures gathered averaged at 23.49% (APR), this indicating a rise of nearly 2 per cent since November 2006.

There are some credit card firms who charge cardholders who have a poor credit rating, a 46% annual interest rate.

Credit card APRs with cash advances normally are much more than the interest charged when completing a balance transfer or if your credit card is used to make a purchase.

Due to these high costs, results have estimated that £750 million each month is withdrawn from ATMs via a credit card.

If balance is paid off in time, this does not guarantee that there will be any extras charged. There is only a selected group of firms which do not charge this fee when withdrawing cash via a credit card.

Chief executive at MoneyExpert.com, Sean Gardner, said: "Borrowing cash on your credit card is incredibly expensive and unless it is really necessary we would urge people to think twice before doing it.

"The average APR was already expensive enough but card firms have pushed up rates by more than 2% in the last six months. There are so many cheaper ways of borrowing than 23.48%."