Did You Know? Credit Cards Aren’t Cash!

Ah, credit cards… one of my favorite topics.

I love writing about them, because they’re an endless source of material. You see, even in our supposedly educated society, people are absolute idiots when it comes to using them. I’ve written about this at length on numerous occasions, but then I’ll read another ridiculous story and off I go again.

Here’s an example…

In a recent credit card survey by Totally Money it was revealed that men are more likely to take cash out on credit cards than women. The findings were published amidst concerns that the cost of fees and interest alone for credit card cash withdrawals has increased by some £21milion in the UK since 2010, now costing the nation around £214 million annually.

Incredible, right? It gets worse.

In addition to the soaring costs, another cause for concern was that many credit card users seemed oblivious to the fact that withdrawing cash in an ATM not only means paying a fee of an average £3.34 per withdrawal, interest on the withdrawal is also charged at an inflated rate without the 56 interest free days that credit card purchases offer.

In a comparison between men’s and women’s understanding of how they were being charged fees and interest on their credit cards, the result showed men being 1.6 times more likely to think that withdrawing cash on credit is cheaper than on debit, and 1.4 times more likely to think that the same applied to withdrawing cash vs making purchases on credit. This might be part of the explanation why 23% of men withdraw cash on their credit cards, while the responding percentage for is women is “only” 18%.

So men are usually worse with credit cards than woman, but not by a whole lot. The numbers are sad all around, and if you haven’t already, it’s time to start thinking about this stuff.

Of the 6 million credit card users that withdraw cash on their cards, 1.2 million do so to pay off other credit card bills. Men are 1.5 times more likely than women to use this “Robbing Peter to pay Paul” method… if you can call it a “method.” In addition to credit card bills, many consumers are using their credit card cash facility to pay utility and general household bills.

cash advance is stupid

Will Becker, CEO and co-founder of TotallyMoney.com offers the following advice to credit card users: “Using a credit card to withdraw cash from an ATM is best avoided, if possible, as it’s an expensive way of accessing cash.  If people have to use their card in this way, they need to check the terms and conditions and choose a provider that offers preferable fees – these rates will also be displayed on monthly statements.”

If you’re going to have a credit card, that’s fine… they’re super useful, but please do yourself a favor and be responsible with it. If you’re dead-set on using it to “withdraw cash” then at least find the most appropriate card available using the Totally Money comparison tool. I think withdrawing cash with a credit card is a terrible idea, but at least if you have the right card you’ll be throwing away less money

(Photos by Ryan McFarland and Unknown)

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Chad

Chad is the co-founder of Unfinished Man, a leading men's lifestyle site. He provides straightforward advice on fashion, tech, and relationships based on his own experiences and product tests. Chad's relaxed flair makes him the site's accessible expert for savvy young professionals seeking trustworthy recommendations on living well.

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