Credit Cards -
Barclaycard slammed for promoting credit card cash withdrawals - 19/05/2008
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Barclaycard was yesterday criticised by industry experts and debts advice charities for encouraging customers to use their credit cards to take out cash.
The company had sent thousands of letters to customers promoting cash withdrawal and even suggesting that credit card holders could use their card to borrow money to pay for every day items such as a newspaper or cup of coffee.
Obtaining cash through credit cards is one of the highest ways of borrowing money. Interest kicks in at 27.9 percent for a Barclaycard as soon as the cash leaves the ATM and all transactions are subject to a 2.5 percent fee, starting at £2.50.
“If you are taking cash out on your credit card to pay for a cup of coffee or a newspaper then you really are in financial difficulty,” said Beccy Boden Wilks of National Debtline.
“There are dozens of cheaper ways to get money for these items. It is a classic symptom of someone who does not have enough to pay day-to-day bills.”
Barclaycard responded to criticism by claiming that the letters were only sent to low-risk customers who already used credit cards to obtain cash.
“As always with cash advances, we’re transparent about the conditions attached to cash, including an explanation of fees and explaining that customers will be charged interest from the moment they withdraw money,” said a spokesman.
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