Friday 24th of April 2009
Credit card customers have been advised not to use these forms of finance to make cash withdrawals.
According to uSwitch.com, high interest rates tend to be charged - a fact that could damage debt management efforts.
With the price comparison site noting that Egg is increasing its withdrawal fees next month, customers of this provider in particular may be affected.
Those who are find that debts from credit cards and other loans are out of control may wish to seek IVA advice, as they may be able to have interest frozen and an affordable repayment plan drawn up.
Louise Bond, personal finance manager at uSwitch.com, said that interest on cash withdrawals begins to accumulate immediately and warned that it is "generally far higher" than for purchases.
"We strongly advise customers not to use this facility on any credit card unless they are really desperate for the cash," she added.
Earlier this week, Which? revealed that many credit card firms have been increasing interest charges despite the base rate being at an all-time low.
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA answers may provide help as debt continues to rise
