Britons 'clueless over credit card cash withdrawals'
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 â€" the month the Consumer Credit Act was reformed by the government â€" 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."
Share this..
Related stories
What happens if interest rates fall to 0%?
We have the potentially intriguing situation which could see UK base rates fall to 0% in the short to medium term as the government tries ever harder to refloat the UK economy. But if rates do fall to 0% where does this leave the financial sector? Savers? Mortgage holders?
A fall to 0% is something which has never been seen in the modern era and something which would be a drastic me...
Is enthusiasm draining away from the property sector?
Despite recent comments from leading UK property companies it appears that while the sector has undergone something of a short-term boost, there are a number of potential banana skins on the horizon. The likes of Berkely Group and Bellway have commented upon uncertainties such as the general election, unemployment and a shortage of mortgage liquidity as potential drawbacks in the medium term. E...
Read MoreUK government set to ban credit card cheques
In a major crackdown on the credit card industry it has been revealed that the UK government is set to outlaw the use of credit card cheques. The cheques are often used as an alternative to credit cards where the card itself may not be acceptable by a retailer or tradesperson. However, many people are unaware that these particular types of cheque attract handling charges as high as 3% as well as...
Read MoreVince Cable confirms sale of Royal Mail
Vince Cable, the business secretary, has today confirmed that the UK government will look to push through a sale of Royal Mail before the next election. It is believed that the government will try to sweeten the deal with a promise that employees and local communities will be able to apply for discounted shares in the flotation although this is unlikely to pacify unions who are steadfastly against...
Read MoreUK government announces new nuclear power facilities
The UK government has today confirmed plans for eight new nuclear facilities across the country but surprisingly these ventures will be taken on by the private sector. In what is a long-term cost reduction programme the UK government has announced that the new expanded nuclear program will be administered by the private sector and ultimately reduce any liabilities in the short term for taxpayers....
Read More