Credit card cheques are merely another method credit card companies have devised in order to market their credit cards. Sometimes, companies mail unsolicited credit card cheques to their customers to tempt them to make purchases with them.
Using Credit Card Cheques is Expensive However, there are critical differences between regular and credit card cheques. While they may offer the same convenience as normal credit cards, there is a hidden side to credit card cheques about which consumers are not really aware. You normally get almost 2 months to pay off your credit card debt, without attracting any interest. This interest free period is generally not given on credit card cheques. You also pay a higher rate of interest since the credit card company considers a credit card cheque as a cash withdrawal instead of a product purchase. You may also have to waive the free insurance offered on credit card purchases as well as pay a 2% handling fee for using a credit card cheque. Not surprisingly, UK consumers pay more than ?20 million in fees and extra costs for using credit card cheques. And it goes without saying that credit card companies earn huge sums of money when consumers use their credit card cheques. Credit Card Cheque Fraud Did you know that thieves can steal and use your credit card cheques? When your credit card cheques are misplaced in the post, or if they fall out of your wallet, well, you would be justified in panicking a bit. The only benefit you get from using credit card cheques is that you can make impulse purchases from your local vendor who won't accept conventional credit cards. However, evaluating the risks and higher costs you pay for using credit card cheques, the pertinent question should not be, "Which credit card cheque should I use". Instead, ask yourself, "Should I burn my cheques now or later"? |
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