Credit Card Advice: 'Don’t Join The 10 Percent Who Use Their Credit Cards For Cash'

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According to a brand new survey by, 10% of people in the UK are racking up huge credit card bills by using their credit cards to withdraw cash.

Withdrawing cash using credit cards is one of the cardinal sins of personal finance

One in ten people have used credit cards to withdraw cash, a new survey has found.

Withdrawing cash on a credit card, rather than a debit card, immediately triggers fees as well as interest charges at punitive levels.

“Withdrawing cash using credit cards is one of the cardinal sins of personal finance,” says Chris Eagle, marketing director at consumer money website

“When you take out money on a credit card, interest is applied immediately, rather than have the 40 days or so grace period you get when pay for something using the card.”

“Additionally you will be charged in the region of 2.5-3% in addition, and even that is subject to a minimum, often around £2.50.”

“The interest charged for cash withdrawals can be as much as 10% more than for purchases. For example, one leading high street bank’s main credit card charges 15.9% APR for purchases, but its interest rate for cash withdrawals is 29.4%.

“Finally, to add insult to injury, many credit card issuers adopt a negative payment hierarchy on your outstanding balances. This means it will use your payments to cover the cheapest debts first, not the most expensive,” added’s Chris Eagle.

The survey carried out in February 2009 among 411 respondents found that 44 of the respondents have taken money out on their credit card.

It’s also important to note that even with a 0% on purchases card – interest and fees will be charged on cash withdrawals.

Similarly, although you may have made a wise decision to swap expensive credit card debt for a 0% on balance transfers card then, once again, cash withdrawals will attract fees and high interest charges.

Understanding the rules of credit cards is vital, if you aren’t going to end up paying a lot more for your money.

Many people in the UK have more than one credit card, according to card payments company APACS. It says that at the end of 2008 there were 71.3 million credit cards in a country of 60 million people.

For more information and quotes contact: Chris Eagle
Tel: 0207 400 6213


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