Borrowers withdrawing £1m a day extra on credit cards

CREDIT card customers are withdrawing £1million more a day from cash machines than last year, official figures reveal.

Between May and July, borrowers took out £1.27billion from ATMs – an extra £90million on the same period in 2017. Experts warn this 8 per cent rise is further proof that households are living beyond their means.

Withdrawing cash on your credit card is very expensive, with banks in the worst cases charging customers a 3 per cent fee per transaction – plus interest of up to 31.9 per cent.

At that rate a £100 withdrawal would cost £105.34 even if you repaid it within a month. Banks claim they charge extra for cash transactions because they have to pay towards an ATM’s running costs, whereas they receive fees for till payments.

But Martyn James, of complaints service Resolver, said: ‘There really is no reason why banks and credit card companies charge so much for cash withdrawals.’

Banking trade body UK Finance said the proportion of credit card lending made up by cash withdrawals has remained fairly constant.