Consumer confusion over credit card cash charges

19 March 2007
A change in the way credit card rates for cash withdrawal are listed means many customers do not realise that the cost of taking out cash is rising much faster than they think, uSwitch.com has claimed.

Although 6.6 million people use their credit cards to withdraw cash each year, as many as 62 per cent may be unconscious that they are paying more than they think for the privilege.

These customers do not understand the difference between the way interest rates are now displayed, as per annum rates, and the way they were previously listed, as APRs, uSwitch found.

As a result, many customers believe rates for withdrawing cash on credit cards have increased by only 23.79 per cent since May 2005, whereas the real figure is 30 per cent.

Moreover, one million people think that withdrawing cash on a credit card is free, confusing it with using a debit card.

Customers must have the new listings system better explained to them if they are to make responsible financial decisions, uSwitch insists.

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