Those hoping to avoid getting into bad
credit card debt will need to make sure they never use the plastic to withdraw money from a cash machine.
That is according to financial advice website lovemoney.com, which claimed that there is "no excuse" for ever having to use an ATM to get money out on a
credit card, except in a real emergency.
It explained that typical rates of interest for doing so are around 25 per cent APR, with many above this figure, and it is charged as soon as the money leaves the machine.
A minimum charge of £2 to £3 is also added, which can be up to two per cent or three per cent of the total taken out.
"In most cases, negative order of payment will mean your cash withdrawal (and all that interest) will be the very last debt to be cleared on your
credit card. In a nutshell - don't do it," the site advised.
The Office of Fair Trading recently produced new guidance for
credit card companies which will make it easier for consumers to pick deals which allow them to avoid high ATM charges.
Posted by Tom Burroughs.
