MBNA is one of the largest financial institutions in the world, so it will come as a surprise to some that they have decided to stop using credit card cheques. This is a positive move and for many a very welcome one. What follows is a brief explanation of what a credit card cheque actually is and why MBNA have decided to stop issuing them…
A credit card cheque is basically a ordinary cheque but one that draws its funds from your credit card. They were origanally designed to just off an alternative form of payment for customers who had credit cards. Sadly they were often stacked with more interest than regular credit card purchases and credit card companies were accused of simply creating more gimmicks to make more money; personally i agree.
It’s a welcome change from MBNA because these interest charges will of course no longer apply. The credit card cheques often come with a handling fee too, and they do not offer the same interest free periods as the credit cards themselves do. Customers are often “tricked” as it were, into using the cheques out of convenience and then suffering the consequences of their actions at a later date.
The credit card cheques will stop circulation on 31st March 2010 and will only be available to credit card customers who personally request them. Thankfully there will be no more “free” cheques being sent through the mail with your credit card statement to entice you to spend more money you don’t have in a different way!
Tags: credit card cheques, credt cards, MBNA