Credit card customers should not check the cash advance rate on their card before they withdraw money.

Cash-strapped Aussies are turning to desperate measures to get money and many are using their credit cards to do so, withdrawing cash and getting gouged up to 30 per cent in interest to do so.

In 2015 Australians withdrew a whopping $9.65 billion in cash advances while the average interest rate charges climbed by 0.07 per cent to 19.41 per cent last year.

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A cash advance is money withdrawn directly from a credit card and the average withdrawal in 2015 was $394.

It may also be transactions the lender considers a cash advance, for example using your credit card to pay a bill.

The estimated $1.87 billion in interest charges is based on customers making minimum-only monthly repayments on cash advances, financial comparison website RateCity found.

The site’s spokeswoman Sally Tindall said people are “throwing money away” by paying exorbitant charges to access an instant funds.

“Australians are still withdrawing close to $10 billion every year through this method,’’ she said.

“Consumers should use cash advances for emergencies only, there are other avenues you can go to if you are cash-strapped.

“For example personal loans which start at eight per cent or the old-fashioned way of borrowing through a family member and writing down a structured way to pay it back are options.’’

RateCity spokeswoman Sally Tindall said using a cash advance is a very expensive exercise.Source:Supplied

Unlike credit card purchases, cash advance interest rates apply the moment the money is withdrawn and greedy lenders are charging up to 29.49 per cent in interest.

Consumers using cash advances are also hit with a withdrawal fee which is as high as $3.

Consumer watchdog Choice’s spokesman Tom Godfrey said cash advances are an easy way for financial institutions to gouge customers.

“Cash advances are nothing short of a cash grab by banks taking advantage of consumers in need of quick cash,’’ he said.

“Most purchases can be made with a credit or other payment card these days and the rates on the best low-rate credit cards are less than half of what the banks charge for cash advances.’’

Cash advance rates on credit cards can be as high as about 30 per cent.Source:Supplied

But the Australian Bankers’ Association’s chief executive officer Steven Münchenberg said cash advances always attract higher rates.

“Given the costs involved, it is ideal that customers take this route as a last resort,’’ he said.

“If customers wish to avoid paying higher interest on withdrawals, debit cards are a good way for customers to be able to access their own funds.’’

Financial institution ME offers one of the lowest cash advance rates on the market at 9.99 per cent but the head of deposits and transactional banking Nic Emenry said consumers need to know the costs involved before accessing money this way.

sophie.elsworth@news.com.au