Credit card withdrawal costs `nearly doubled`

Research from uSwitch.com has suggested that some credit card companies are nearly doubling the cost of withdrawing cash in an effort to deter struggling customers from making small cash withdrawals.

As an example, uSwitch mentioned Egg - which will increase its minimum cash withdrawal fee from £3 to £5 (or 3%, whichever is greater). Meanwhile, Smile is to increase its minimum fee from 2.5% to 3%, according to uSwitch.

According to uSwitch, Egg`s move is `designed to deter customers from making small cash withdrawals, as this is often a clear sign of financial difficulty`.

A spokesperson for debt management company Gregory Pennington said: "Cash withdrawals from credit cards can be particularly expensive compared with withdrawals using debit cards, which are usually free.

"Withdrawing cash with credit cards also carries the risk of future debt problems if the credit card balance is not settled promptly, so we would advise anyone who finds themselves struggling to avoid making such withdrawals and, if they feel it`s necessary, seek debt advice."

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.