£219m credit card cash bill

CONSUMERS withdrew £4.6bn of cash using their credit cards in a year – racking up a £219m bill from interest and charges.

There were more than 36m withdrawals using credit cards from December 2017 to November 2018, according to a study by advice website Moneycomms and credit score firm Totally money.

But this is a very costly way of getting hold of cash – often used as a last resort by households with nowhere else to turn. The average customer took out £125 a time.

Most lenders charge hefty fees for cash, with an average bill of £3.88 for a withdrawal this size according to Moneycomms. This would lead to fees of £140m in total.

The customers would have been charged around £79m more in interest on the money withdrawn, researchers said, at an the average interest rate of 22.5pc. The huge amounts of cash being taken out on credit cards suggests some families are racking up debts just to fund their everyday spending.

Andrew hagger, of Moneycomms, said: ‘If you withdraw cash on your credit card, it will show up on your credit record and could be a danger sign to other lenders that may look at your record in the future.

‘Prospective lenders may think you’re making cash withdrawals on your plastic because you have no money left in your current account.’ he said the highest fees for a cash withdrawal are charged by Virgin Money, MBNA and Creation Cards, which each levy a fee of 5pc that would come to £6.25 for someone taking out £125.

The only provider which does not charge a fee is Metro Bank.