Britons are taking out £8.3 billion cash on their credit cards each year and paying a huge premium for the privilege.
Analysis from price comparison site moneysupermarket.com shows one £20 cash withdrawal per month can result in cardholders paying £65 in fees and interest, or 27 per cent, over the year – and that's even after paying off the balance at the end of each month. Between the nation's leading credit card providers, the average amount someone will pay on those 12 withdrawals will be £36, or 15 per cent.
Rob Kenley, head of credit cards at moneysupermarket.com, said: "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. The real killer is the cash withdrawal fee of between £2.50 and £5 on most cards, other than Egg Money which does not charge any cash withdrawal fees.
“Wherever possible you should only withdraw cash from your current account, but we realise sometimes people face unexpected emergencies. If you run out of money but still need to make purchases, then using a credit card with 0 per cent on purchases is much more cost effective.”
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