MBNA UK Stops Issuing Credit Card Cheques

This is a post from Sandra of Thinkingmoney.org. She thought this update about MBNA’s action in the UK would interest some of you

One of the biggest credit card cheque issuers in the UK, MBNA stops issuing them

What are credit card cheques? In their simplest form they are blank cheques issued to you by your credit card provider, normally sent out with your credit card statement. They are a different option to using your card. But what most are unaware is they can have crazy interest rates and begin charging these immediately after they have been used. To stay ahead of the game, and due to high consumer demand, MBNA have decided to stop issuing these credit card cheques. A law is due to be passed later this year, to ban unsolicited credit card cheques, however upon request lenders will still be able to issue them to customers.

“While credit card cheques are still valued by many of our customers, we acknowledge that, increasingly, the majority of our customers are choosing to access their accounts by other means,” Greg Reed, The chief marketing officer for Bank of America (MBNA) What will be interesting to see is the amount of people that will still request credit card cheques from their banks even though the ridiculous interest you have to pay on them makes these low APR credit cards look like loose change.

What makes them even more unappealing is that there is also no interest free period; you will get charged the minute the cheque is cashed by the receiver. There is even a handling fee charged by the
banks for using them and you will not be protected like a credit card if they are misused by someone else. To stop issuing them altogether would ultimately help combat fraud, if someone uses your credit card cheque against your knowledge, you will not find out until you get that bill, which you cannot contest and will be made to pay! Even though the Bank of America have stopped issuing the cheques, if
you still have some left you can use them up, but be warned no more will be issued.

Many people like to use these cheques as a means to time until payday. These people are no doubt already deep in bad debt in order for them to have to resort to using them, why they think it is then a good idea to further the debt by suing them is anybody’s guess. Think of it like giving a recovering alcoholic a free drink. There are consequences, but at the time the tempted are not going to think that
far ahead, but later pay for their moment of weakness!