Another Reason Not to Withdraw Cash

Recently we commented on the huge interest rates being charged on cash withdrawals made using credit cards.

If that wasn’t bad enough you can also throw in the average 2.5% cash withdrawal fee credit card customers are currently charging customers for the privilege of accessing their own money.

With more than £700million worth of cash withdrawals each month being carried out on credit cards we are being charged around £17.5million to use ATMs.

In an increasingly competitive market credit card companies are becoming evermore reliant on such charges to meet their profit targets.

These fees cannot be justified and customers can fight back by refusing to withdraw cash on the credit cards. Join the revolution and use only debit cards for withdrawing cash.

A quick mention for Abbey and The Co-operative Bank who do offer credit cards without a cash handling fee. If for some reason you need to regularly withdrawal money on your credit card check them out.

Fee Free Balance Transfers To Disappear?

The UK credit card market is witnessing the decline of fee free balance transfer cards.

Hugely popular with UK cardholders these deals were frequently used by so called “rate tarts” to move debt around without incurring any costs and keeping interests rate at 0%.

According to findings by cardguide.co.uk many lenders have withdrawn these offers as they were missing out on huge amounts of revenue. Sites such as Martin Lewis’ moneysavingexpert.com taught people how to juggle their debts effectively meaning credit card companies lost out on millions of pounds in interest charges.

However the banks fought back. While there any dozens of 0% balance transfer offers still available many now come with a balance transfer fee. This is typically 2.5% of the balance you transfer and is used by lenders to lock in profit.

Despite remaining enormously popular the number of fee free deals is dwindling. A few can still be found on comparison websites but they are now temporary promotions to boost business.

If you can get a fee free balance transfer card then go for it but don’t be put off by those that charge a fee, long term you can still benefit and make a saving during the interest free period.

Should Credit Card Holders Use Secured Loans?

More UK customers are unhappy with the service provided by their credit card company than ever before. As the level of UK credit card debt continues to rise an increasing number of people are struggling to cope with their debts.

This frustration is now being taken out on the credit card companies with many people unhappy at what they deem unfairly high interest rates and too many extra fees.

Many are now considering moving their credit card debts to a secured loan to bring all their debts into one place and cut all the stress now associated with juggling multiple credit cards. But is this a good idea?

For those who have high volumes of debt the answer could well be yes, with a secured loan the interest rate would be lower and the debt can be managed far more easily. However before rushing into a decision it’s important to remember that this form of borrowing is secured on your property, which you could lose should things go wrong.

While people are complaining about high interest rates on credit cards they should bear in mind that credit cards are really for short term borrowing that should really be paid off each month. They should not be used for long term debt unless a 0% offer is available. If you have long term debt on a high interest credit card you should act to cut the interest rate, either by switching to a new card or transferring the debt to a loan. Moaning about credit card companies will not help you take control of your debts.

If you are considering a secured loan always seek expert advice before committing to any agreement.

Avoid Minimum Monthly Repayments

Too many UK credit card customers are making only the minimum monthly repayment on their credit card billing a report by The Consumer Credit Counselling Service warns.

In spite of the high interest rates charged on credit card debts many UK cardholders choose to make the minimum repayment each month. In most cases the minimum payment only pays off some of the interest that has built up on your account, leaving the bulk of your balance to continue building up interest and increasing your overall debt.

This trend can result in debts becoming out of control and leave you facing real finance problems. Making an effort to pay more than minimum can help you pay off your credit card balance more quickly and save you lots of money by avoiding accrued interest.
If you are currently paying interest on your credit card continue transferring your balance to a new 0% balance transfer card and reduce the amount you owe as much as possible before the interest free period comes to an end.

Using Your Credit Card to Withdraw Cash? STOP!!!

Recent new figures suggest the average interest rate charged for using your credit card at an ATM is 23.48%, up from the 21.27% average of six months ago, with some cards charging a ridiculous 46% for cash withdrawals using your credit card.

Despite these huge charges UK credit card customers withdraw more than £700million each month on their plastic.

The majority of credit card companies charge you interest from the date the cash is withdrawn, there is no interest free period as with some purchases and balance transfers.

While the “rate tart” culture has made it more difficult for credit card companies to make huge profits they can make a considerable amount from cash withdrawals.

When you next have to withdraw money from a machine consider if it would be best to use a debit card (which if necessary can be paid off with a credit card) and avoid costly interest charges.

If you cannot avoid taking out cash with your credit card try to find a card that offers as low a rate as possible and try to pay off the outstanding balance as quickly as you can.