Fast cash loans an expensive trap

CREDIT card giants have been accused of profiteering from customers who borrow cash.

Firms have put up rates for withdrawing money from ATMs by more than two per cent on average in the past six months ago.

It comes as the card companies are already forced to defend the exorbitant charges they impose.

Britons use credit cards to withdraw around £750 million a month, according to recent figures.

Many of those who do so are people on low incomes or who have difficulty borrowing money elsewhere.

Research by the price comparison website Moneyexpert.com found the average annual percentage rate (APR) for customers using a hole-in-the-wall has gone from 21.27 in November last year to 23.48 per cent now. Interest is charged from the day of withdrawal.

To matters worse card companies add on a one-off fee every time a customers withdraws money. The average charge is around 2.5 per cent but can be as high as three per cent.

It means someone borrowing £100 on their card will now pay £25.98 in interest and fees assuming they took as long as a year to repay the balance.

source:http://www.express.co.uk