Alex Druce
(Australian Associated Press)

The number of cash withdrawals on Australian credit cards has dropped to a near quarter-of-a-century low as consumers switch to other sources of credit.

The number of cash advances from credit cards between January and March this year fell to 4.9 million, 17 per cent lower than the same period 12 months ago, according to Finder.com’s latest analysis of RBA and ABS data.

That’s the lowest it’s been in 24 years.

With credit sources including buy now, pay later services on the rise, about $1.8 billion was withdrawn as cash advances during the period – $456 million less than last year and the lowest level on record.

Credit cards with a cash advance facility allow consumers to withdraw funds from an ATM, though this usually attracts interest of around 19 per cent to 22 per cent in comparison to personal loan interest rates of between six and 16 per cent.

Finder.com money expert Bessie Hassan said the decline was encouraging because it means fewer people being stung by fees and often-higher interest rates.

But Ms Hassan also stressed the need for consumers to assess the pitfalls of using alternative credit sources, including personal loans, credit cards, or by now, pay later services such as Afterpay and ZipPay.

“Shoppers are increasingly able to get their hands on products and services without needing to hand over much – or in some cases, anything – at point-of-sale,” Ms Hassan said.

“The key here is to compare your options and understand how your preferred alternative works – making an informed decision now may save you from a nasty surprise down the track.”

Finder.com said the decline in credit advances also reflected Australia’s march towards becoming a cashless society thanks to the normalisation of tap-and-go payments.