- Thursday, 20 May 2010Consumers are being warned by moneysupermarket.com that using their credit cards for online gambling counts as a cash withdrawal for which higher interest is charged.
Higher rates could lead to the possibility of a
debt management plan being required as consumers can be caught out.
The comparison site researched different credit card providers to find out what they counted as a cash withdrawal and found that transactions for online gambling, purchasing foreign currency and postal orders were included.
Cash withdrawals often charge a higher APR of up to 11 per cent more than the card's advertised rates which could mean consumers are paying more than they expected, leading them to need a
debt management plan.
Kevin Mountford, head of banking at moneysupermarket.com, said: "Credit card users have to be careful how and where they use their card. The vast majority of consumers are aware that withdrawing cash on a credit card can be a costly exercise and should be avoided.
"However, many people do not understand where else their provider will treat purchases as cash withdrawals and can be fooled into making a pricey mistake."
Furthermore a good way of avoiding the need for a
debt management plan because of credit cards is to switch to another provider when the zero per cent balance transfer interest rate runs out.
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Registered Office: 45 Clarendon Road, Watford WD17 1SZ
Consumer Credit Licence Number: 0580960