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Credit card companies cashing in on 'plastic dependency'
22/07/2008 17:32:00
Credit card firms are "cashing in" on consumers relying on plastic to keep adrift of the rising costs of living, according to a financial expert.
One way people are using their cards is to withdraw cash from ATMs, according to MoneyExpert.com.
Research from the independent financial comparison site has shown that around two-thirds of cards charge clients more than the market average APR for withdrawing cash, with the priciest charging 46.19 per cent.
Customers are urged to pay off their balances as soon as possible so that the money they have withdrawn does not accrue further interest and cause longer-term problems for the borrower.
Sean Gardner, director of the company, said: "Before you put your credit card in an ATM for cash, remember that it is one of the most expensive forms of borrowing around. Unless it's absolutely necessary you should try to find another way to make a payment."
The study shows every month that millions of pounds are withdrawn from ATMs using credit cards.
Money education site Fool.co.uk recently said the recession predicted by Ernst and Young as inavoidable in 2009 may happen due to people not having any money left and diminished access to cheap credit.
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