Bradford & Bingley credit cards warn against cash withdrawal

Money News

www.moneynews.co.uk > Credit cards > Bradford & Bingley credit cards warn against cash withdrawal

Topics

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet

Features

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet

Companies

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet

Money News

bullet
bullet
bullet
bullet
bullet

Bradford & Bingley credit cards warn against cash withdrawal

The introduction of chip and pin technology could see a massive increase in the number of people who take out cash on credit cards, Bradford & Bingley has warned.

From January 2005 chip and pin technology will be rolled out nationwide, requiring cardholders to type in a four-digit pin number rather than signing for goods.

The scheme is designed to reduce the amount of card fraud in the UK, but may have some less welcome consequences for consumers.

Currently many people refuse to memorise their credit card pin number to prevent them using it for cash withdrawals .

With the introduction of chip and pin, everyone will be required to know their pin number to make a purchase, so the number of people who use credit cards to withdraw cash is predicted to rise.

Credit card cash advances are seen as bad value, as in addition to a two per cent or £2 charge (whichever is greater) at the point of withdrawal, credit card providers tend to charge interest on cash withdrawals form the moment the money is taken out, waiving the normal 56 day interest free period on purchases.

Bradford & Bingley has found that while fewer than one in five (18 per cent) UK adults frequently withdraw cash on their credit cards at present, after the full introduction of chip and pin this number is set to jump to 30 per cent.

The bank points out that if a cardholder makes one cash withdrawal a week on their card of £100 or less, over a year they will pay more than £100 in fees.

Michael Senior, head of personal lending at Bradford & Bingley, said: "Although chip and pin has been devised first and foremost to provide security and reduce the likelihood of fraud, there is a very real possibility that it will also increase the amount of cash withdrawals on credit cards.

"A major underlying problem with this is that cash advances on credit cards are often charged at a much higher rate. We would impress upon card holders, who plan to make cash withdrawals using their credit cards, to think about the added cost implications and whether there are cheaper alternatives."

Related News : Credit cards

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet

Related News : Providers

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet

Related News : Bradford and Bingley

bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet
bullet