Credit Card Cash Withdrawals Fall

5th June 2007

The amount of money that consumers have withdrawn from cash machines, using a credit card, has fallen by over 1 billion pounds in the last year, which shows that consumers are becoming increasingly "savvy" over credit card companies charges for cash withdrawals. Debit card withdrawals increased by over 10% in the same period.

Research from APACS, the UK payment association, shows that total cash withdrawals fell from just over 9 billion in 2005 to just over 8 billion in 2006. "Consumers are generally more aware of credit charges than they have been in the past, everybody's becoming more savvy" said an APACS spokesperson.

Withdrawing cash from a cash machine using a credit card will immediately incur interest costs, as there is no interest free period on a cash advance, and will continue to incur interest until the full amount is repaid. Fees for cash withdrawals have risen substantially over the last two years.

Our advice would be to only withdraw cash using a credit card as a last resort to avoid paying interest at the very high rates now being charged on cash advances. As always we recommend that you read the small print relevant to your own credit card to see what your credit card cash advance interest rates are.