MBNA scraps credit card chequesMove to scrap poor-value high-fee cheques welcomed
23 March 2010
MBNA has announced that it is to stop issuing credit card cheques from the end of March, a move welcomed by Which?.
Which? has long campaigned against credit card cheques as they offer poor value and often come with high fees attached:
- The interest rate (APR) on credit card cheques is often significantly higher than the standard purchase or balance transfer rates.
- There is usually no interest-free period on new purchases made with credit card cheques.
- Consumers lose vital when paying with a credit card cheque, compared with making the same purchase using the plastic card itself.
MBNA seeks 'to offer better choice, added value and simplicity'
Greg Reed, chief marketing officer for Bank of America Europe Card Services, which operates the MBNA brand, said: 'Credit card cheques are still valued by some of our customers. However, we acknowledge that, increasingly, the majority of our customers are choosing to access their accounts by other means.
'Whilst it’s true that new legislation will change the way credit card cheques can be provided to customers, we have decided to go one step further and remove them altogether. This strategic decision is part of a number of changes we will be making over the coming months as we seek to offer better choice, added value and simplicity for our customers.'
Which? welcomes ditching of credit card cheques
Martyn Saville, Which? credit card expert, commented: 'It's great news that a major credit card company is finally seeing the light and scrapping credit card cheques. Not only do credit card cheques attract a higher interest rate and no interest-free period, they actually cost consumers some of their rights under the Consumer Credit Act.
'It's time other providers followed suit and scrapped credit card cheques, rather than use them to boost their own profit margins and dodge the consumer protection that the law provides under Section 75.
'Any consumers who receive credit card cheques or have old ones in a drawer at home should shred them.'
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