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Just when many analysts had come to terms with the 3.5% rise in retail sales in May and the fact this did not seem correct, June has seen a fall of 3.9% in sales – the worst fall in 22 years. The...
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Monday 19th March 2007
Consumers are largely unaware of the true cost of making cash withdrawals via their credit cards, according to new research.
One million Britons wrongly believe that using ATMs with credit cards is free, as with debit cards, uSwitch says.
The price comparison website claims the confusion arises from the way in which credit rates are determined following legal changes? to the display of interest rates.
In May 2005 – the month the Consumer Credit Act was reformed by the government – the average APR for cash withdrawals was 20.8 per cent, but today stands at the equivalent of 27.1 per cent.
This increase could have added up to £334 million to Britons' credit card bills, uSwitch says.
"Consumers could be forgiven for thinking that they are being treated as the banking industry's personal ATM," said Nick White, director of financial services at the website.
"It's easy to see why the major banks continue to announce record profits, which this year alone totalled in excess of £40 billion, when the welfare of their customers continues to take a backseat to shareholder profits.
"People who use a credit card to withdraw cash may already be struggling under the burden of debt, and are having to resort to this method of borrowing to make ends meet.
"They can ill afford to pay the exorbitant rates of interest that most lenders are now charging them."
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