Financial Services > Credit Cards > Credit Cards News

Watchdog slams vagueness of credit card cheques

Thu, 02 Mar 2006

Consumers need to be warned about the financial implications of using credit card cheques, according to the Office of Fair Trading (OFT).

Credit card cheques enable consumers to use money available in an existing credit card account, but the OFT warns that this form of payment is associated with higher interest rates and added fees.

Many users of credit card cheques are unaware of these charges, with the OFT estimating that unsuspecting consumers shell out some £57 million a year for these fees.

Therefore it is calling for the introduction of legislation to ensure those who are considering using credit card cheques are adequately informed about the financial implications of using this form of payment.

"Consumers need good quality information about the costs and other potential disadvantages of credit card cheques before they consider using them," states John Fingleton, chief executive of the OFT.

He notes that this is not always happing, adding that the OFT is urging the government to introduce legislation to protect consumers.

The OFT wants credit card cheques to come with an explanation of how using them varies from using a regular credit card.

In addition, the watchdog highlights the need for consumers to be made aware of what the interest rate on credit card cheques is, as well as when interest will be charged.

Additional fees that may be charged need to be brought to the attention of potential users of credit card cheques, the OFT suggests.

It also states that it supports other consumer groups that have called on companies to not send credit card cheques to consumers who have not requested them.

add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

Choose a credit card

Choose the perfect card

Choose the right credit card for you and apply with confidence.

Choose a credit card