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11th Apr 2014 3:25pm | By Editor
If you're dreading the end of the month and thinking about getting some cash out on your credit card, we'd urge you to think again...
A new Totally Money study has revealed that men are more likely to take out cash on credit - 23% of men as opposed to 18% of women.
Other statistics from the survey shed a light on why men are more likely to do this. For example, the study shows that men are 1.4 times more likely to think it's cheaper to take out cash on credit is than to make a purchase. They are also 1.6 times more likely to think that withdrawing cash with a credit card is cheaper than with a debit card.
Many consumers seem oblivious to the fact that taking out money with a credit card can incur large charges. According to the recent statistics, one in four people do not know that it costs more than withdrawing cash with a debit card. This is worrying, especially as fees are on the rise.
Since 2010, the average charge for withdrawing cash on credit as risen by 53p to £3.34. There is also an inflated interest rate of just under 24.49% from the day the cash is taken out. Normally, there is a standard interest-free period of 56 days.
Each year, £214 million is charged to credit card users who take out cash. Why are so many people, particularly males, totally unaware of the charges they are incurring? Is it because the information is not readily available, or because people are not taking the time to thoroughly look into the details of their credit card policy?
According to the recent data, six million consumers withdraw money on their credit card every year and 21% grab the first card in their wallet and don't give it a second thought. (Perhaps if they knew the charges involved, they'd think twice). 40% of people said they withdrew the money because they had run out of cash.
For some, it seems that withdrawing cash on credit is the only option towards the end of the month when money is running low. If you really must use your credit card to withdraw cash, make sure you shop around a credit card with the lowest charges. You can use a price comparison tool like the one on Totally Money which will allow you to find the best interest rates and fee costs.
At the moment, the best deal for those who need to withdraw cash on credit is the Halifax Clarity Card - there is no cash withdrawal fee.
Image credit: Thinkstock
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