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Barclays has defended its decision to send out letters encouraging customers to use their credit cards to withdraw cash from ATMs despite the high charges this incurs.

In a report in the Daily Mail newspaper, debt campaigners criticised Barclaycard for sending a letter to thousands of customers encouraging them to use their card to withdraw cash for "a cup of coffee or your daily paper".

Using a credit card to take out cash is often very expensive and finance experts advise against it. In the case of Barclaycard, a cash withdrawal incurs a 2.5 per cent charge, with a £2.50 minimum.

In addition, interest is charged on withdrawals at a rate of 27.9 per cent.

Barclaycard said: "Barclaycard is a responsible lender and has not sought to persuade people to make additional cash withdrawals.

"It is never in the company’s interest to persuade people to borrow more than they can repay and Barclaycard is always explicit on any fees and charges associated with customer activity.

"This campaign is targeted at low-risk customers who we believe may be taking out cash occasionally on competitors' credit cards. The objective of the campaign is to persuade those customers to use their Barclaycard on those occasions rather than to increase the number of cash withdrawals made."

Barclaycard added that customers "value and appreciate" the facility to take out cash on their credit card.

The company also claims that not all customers are charged at the 27.9 per cent rate. "Services are priced according to risk and it would be unfair to charge all customers the same rates for withdrawing cash," the lender said.