Credit card provider Egg has announced it is to raise its withdrawal charges by 0.5 per cent, from 2.5 to three per cent, starting on July 1st.
The move is designed to hit those taking out small withdrawals the hardest, as it is a sign of financial insecurity, and the credit card charges will cost three per cent of the amount withdrawn, or 5, whichever is the greater amount.
uSwitch.com research has shown that 7.3 million people use credit cards for withdrawing cash, usually of amounts of just under 100 each time, leading to 161 million in interest charges each year.
Louise Bond, personal finance manager at uSwitch.com, has urged credit card customers not to use the service as “interest is applied to credit card cash withdrawals from the day they are made and the annual percentage rate is generally far higher than that applied to purchases”.
Moneyfacts.co.uk recently warned travellers that they may be hit by foreign usage charges, which are applied for each credit card transaction abroad by some companies.
