Rip Up Rip-Off Cheques
If your credit card company sends you a blank cheque, find your dustbin.
If you've ever received a handful of blank cheques from your credit card company I hope you did the sensible thing and binned them. The charges for using them are astronomical!For a start, you're quite likely to face interest rates of 20% or more on whatever you use them for and you'll be charged this interest from the moment the cheque's cashed. Then there'll be a 2% handling fee and quite possibly a further fee if you're using the cheque for balance transfer purposes.You also don't get the same degree of protection as you do when you use the actual credit card itself where card providers are equally liable for a breach of contract by the supplier in respect of items worth more than £100.Unfortunately, credit card companies aren't very good at spelling out these things and it's proved a sore point with both the Office of Fair Trading and the consumer group, Which?. Both say consumers need clearer information about the cheques and the OFT is calling for a change in the law to force companies to spell out the costs of using them.The problem is that people mainly tend to use them in an emergency. After all, if you have to call out a plumber he's unlikely to take a credit card. And companies often send out the cheques with marketing literature urging you to use them for holidays or gifts -- something Which? says only encourages indebtedness.Which? and the OFT want the practice of sending out unsolicited cheques banned. Although people can opt out of receiving them if they wish, they'd prefer it if it was the other way around i.e. that they should not be sent out without the card holder's consent.Either way, there are cheaper ways of borrowing than using a credit card cheque. So next time you get sent one, use your shredder.