Credit cards and cash don't mix

Using your credit card to withdraw cash from an ATM could be an expensive mistake, new figures show.

Data from MoneyExpert.com shows the average person withdrawing cash with their credit card is charged 23.48 per cent interest, with the most expensive card charging 46.19 per cent.

And not only is this expensive, the cost is rising - six months ago the average amount charged was 21.27 per cent.

"Borrowing cash on your credit card is incredibly expensive and unless it’s really necessary we'd urge people to think twice before doing it," said MoneyExpert chief executive Sean Gardner.

"The average APR was already expensive enough but card firms have pushed up rates by more than two per cent in the last six months. There are so many cheaper ways of borrowing than 23.48 per cent.

"It can be tempting to use you credit card to take out cash but if you do you should clear the balance as soon as possible. Using a debit card for cash withdrawals is almost always the best idea."

But despite this added cost, some £750 million a month is taken out of cash machines using credit cards.

And this could even cost those who pay their balance off in full every month, with many credit card companies charging fees of up to three per cent for withdrawing money.

However, some cards are better than others, with the Co-Operative Bank’s Base Rate for Life Visa charging just 5.6 per cent for cash withdrawals and Egg Money, Abbey and the Co-Operative Bank do not charge withdrawal fees on at least one of their credit cards.