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Citizens’ Advice Calls For Increased Credit Card Awareness
Almost 40% of people contacting the CAB for debt management advice use credit cards as their primary means to withdraw money from cash points.
Credit card cash withdrawals are an expensive way to borrow, however, The Citizens’ Advice Beraeu says that few people appear to be aware of this and as to how they will be charged for the transaction and the resulting interest.
What many people don’t know is that interest for cash advances is higher than for purchases and is normally excluded from introductory rate offers. Also, interest is changed from the date of the transaction, not from up-to 60 days in the future as with conventional credit card purchases.
The CAB says that more needs to be done with regards to increasing consumer understanding about credit cards. In a many credit card holders who run into debt management difficulties admit a lack of understanding and in some cases sheer ignorance with regards to how credit is charged and interest calculated.
In our experience of advising people with debt problems, we encounter many who phycologically think the credit available to them is actually their money. It’s been given to them and is there for them to use as they want.
One leading credit card company preys on this refering to its card credit limit as “spending power”.
It’s the credit card company’s money and every time you use you credit card at the wall machine, you are borrowing more and going more into debt.
