Debt management solutions may be needed due to credit card charges
Debt management solutions may be needed due to credit card charges
Friday 24th April 2009
Consumer website uSwitch.com has singled out Egg as the one to watch out for, warning customers to use their credit cards cautiously due to the fact that the minimum cash withdrawal charge on the cards will increase.
According to research conducted by the website, 7.3 million credit card holders purchase goods on cards around five times a year but rake up £161 million in interest charges alone.
These users make an average withdrawal of £100 every time, equating to 38 million withdrawals every year.
Such withdrawals would have previously cost an Egg customer £3 every time but the charge is now set to rise to £5, which is equivalent to £25 a year in withdrawal fees alone, the website said.
The increase is designed to discourage customers from making small cash withdrawals, which uSwitch said is normally "a clear sign of financial difficulty".
According to Louise Bond, the personal finance manager at uSwitch.com, the motive behind Egg's decision to revise the charges "is reasonable".
"However, we strongly advise customers not to use this facility on any credit card unless they are really desperate for the cash," she said.
"Interest is applied to credit card cash withdrawals from the day they are made and the APR is generally far higher than that applied to purchases."
The organisation has also identified Smile as having adopted a move similar to that of Egg, with an increase of 2.5 per cent to three per cent kicking in from July 1st.
Credit action puts the total UK personal debt at £1,458 billion.
News article brought to you by Debt1 – UK debt management specialists.
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