Egg credit card - minimum cash withdrawal fee up from £3 to £5

As the holiday season kicks off, Egg customers should use their credit cards with caution as the minimum cash withdrawal fee will increased from £3 (or 3% whichever is greater) to £5 (or 3% whichever is greater) from the 28th May.

The move by Egg is designed to deter customers from making small cash withdrawals with their credit card, as this is often a clear sign of financial difficulty.

Research from uSwitch.com has shown that 7.3 million (16%) credit card customers use this facility around five times a year, making average withdrawals of just under £100 every time. Previously, this would have cost egg customers £3 for each of these withdrawals, this will now increase to £5.00 - totalling £25 a year in withdrawal fees alone in a year.

Louise Bond, personal finance manager at uSwitch.com comments: "The rationale for this change is reasonable. However, we strongly advise customers not to use this facility on any credit card unless they are really desperate for the cash. Interest is applied to credit card cash withdrawals from the day they are made and the APR is generally far higher than that applied to purchases."

Credit card customers already pay £161 million in interest making a total of 38 million credit card cash withdrawals every year.