The Money Stop

Credit card provider Barclaycard has been accused of acting irresponsibly after it was found that the financial giant had been contacting customers in order to try and encourage them to take money out on their credit cards. With many consumers strapped for cash in the current financial climate Barclaycard appears to have been taking advantage of the situation by trying to talk its credit card customers to use their cards in order to get their hands on instant cash.

The offer could come across as very tempting to many consumers, given that Barclaycard has been apparently sending out mailings enticing them to take out instant cash. The card provider has even raised the withdrawal limit so that consumers can take out more money on their card. However, officials have urged consumers to remember that the cost for taking out money on their cards will be very high, with a cash withdrawal interest rate of 27.9% and an addition cash advance fee of 2.5% with a minimum of £2.50.

One industry official recently said: ‘When we are going through one of the worst periods of financial turmoil for many years, when people are really starting to struggle with their bills, this type of letter is grossly irresponsible. Making cash withdrawals appear more normal in this way, like an everyday activity, is extremely bad advice. It may be good for the company but it is dreadful for the consumer.’

Another stated: ‘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. 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. You really shouldn’t be encouraged to do this.’

Recent additions:

• Benefiting from credit cards as a student
• Avoiding credit card pitfalls
• Avoid being the victim of credit card fraud

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