Credit card cheques may be curbed under new legislation, and that will be good news for credit card customers.
Some credit card companies send out credit card cheques with their monthly statements, mostly without the permission of the card holders.
Whilst offering “no questions asked” access to instant credit, credit card cheques come with high transaction costs and interest charges.
Using a credit card cheque can cost far more than making purchases on your normal credit card and therefore generate large profits for card companies.
Unfortunately my own credit card company sends me a fistful of credit card cheques with my monthly statement. They go straight in the shredder.
Those who see them as easy means of credit may be tempted to use them. After all, they are there, so why not use them?
It is that impulse that proves so tempting for some credit card companies and that is why they send them out, unasked for, to millions of their customers.
You can contact your credit card company and ask them to stop sending the cheques to you, but if you are like me, you probably haven’t got around to doing that.
So if the Government does tighten up the legislation to restrict the marketing of credit card cheques, then it has my support as it will reduce the temptation for card customers to use these costly forms of credit.