McCarthy, the 20-year old Glasgow-born Republic of Ireland international, is being linked with a possible summer shift to either Liverpool or Arsenal but McArthur hopes he stays put at DW Stadium and continues his development in a first team environment.
"I'm sure he'll be tempted if there are offers there," said McArthur.
"So it's a Catch 22 and a hard decision for him again."
And McArthur admits that his former Hamilton Academical teammate was always going to make it to the top.
"I always believed he would play in the Premier League and when I saw him make his debut and he was doing so well, I knew he would kick on, and he has," he added.
"Playing with him this season has been brilliant, he is one of our top performers.
"He was a young boy at Hamilton and has gone down there and become a Premier League star.
"He has been linked with so many moves, it shows how well he has done."