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OFT warns over credit card cheques
02/03/2006 16:30:00
The Office of Fair Trading (OFT) is warning Britons to stay away from credit card cheques – while consumer groups are saying they should be ripped up and not used.
Intended to be used for transactions when retailers do not accept credit cards, the cheques tend to come with a higher interest rate and the interest-free period offered by cards does not often apply.
Furthermore, there is usually an additional cost for using the cheques – typically valued at two per cent of the transaction value.
Mike Taylor of Which?, the consumer watchdog, said: "We want unsolicited credit card cheques to be banned, especially as we have found that companies use them to encourage indebtedness."
He went on to say that they are sometimes sent out to customers suggesting that they could be used to pay for gifts or holidays.
"Cardholders should rip up any cheques they are sent and should ask their credit card company not to send any more," he concluded.
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