Egg credit card, owned by US banking giant Citigroup, is to increase the fee it charges for cash withdrawals from £3 to £5.
The change, which will come into force on 28 May 2009, will mean an increase of 67% in cash withdrawal fees, even before calculating the interest charged on the balance.
As Egg allocates any repayments to your cheapest debt first (for example, 0% balance transfers), cash withdrawals will often stay on your card until you’ve cleared all your purchases and balance transfers. And you don’t get an interest-free period on cash withdrawals, so you could end up paying an APR of up to 25.9% until your balance is cleared in full.
‘Don’t use your credit card to withdraw cash’
Martyn Saville, Which? credit card expert, commented: ‘It is disappointing but unsurprising to see Egg now increasing their charges for other transactions, just months after hiking up interest rates by up to 7% for half a million existing customers.
‘Consumers should avoid using their credit card to withdraw cash – not only will you have to pay a cash withdrawal fee, but the APR on cash withdrawals is also usually much higher than for purchases. For Egg Visa card users, the typical cash withdrawal APR ranges from 22.9% to 25.9%. And this at a time when the Bank of England base rate remains at 0.5%.
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