MBNA to cease offering credit card cheques
By UK CreditCards.com
MBNA has confirmed that it will soon be putting an end to its distribution of credit card cheques. The company, which is a subsidiary of Bank of America, revealed that it will stop issuing all new promotional, standard credit card and replacement cheques from March 31st onwards.
What are credit card cheques?
Credit card cheques work in a similar way to standard cheques issued on current accounts, in the sense that they allow payments to be made without the need for cash. Rather than use a cheque guarantee card to underwrite a purchase, consumers use their credit cards instead and a charge is added to the monthly bill. However, lenders often apply higher fees for using the cheques than they would for withdrawing cash or making simple transactions on credit cards.
Sign of the times
Greg Reed, chief marketing officer for Bank of America Europe, conceded that credit card cheques are still valued by a number of consumers. However, he also explained that the move is consistent with the UK government's recent confirmation of five new laws which are designed to help consumers manage their credit card debts more effectively.
"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," he said.
"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," said Reed.
How will it affect you?
MBNA has suggested that it took the decision in an attempt to offer higher standards of "clarity, simplicity and transparency" within the credit card industry. Customers will still be able to make balance transfers online or over the telephone, while cash can still be withdrawn on credit cards over the counter or at ATMs.
Under the company's plans, individuals can still order replacement cheques up to and including March 31st, and they will be sent out within seven working days. In addition, they will be permitted to use any cheques they already possess prior to this deadline. MBNA customers are set to receive a full appraisal of the changes in their credit card statements for March and April.
Published: 24 March 2010
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