UK credit card issuer Royal Bank of Scotland is to cancel its credit card cheque system after research among its customers found that there was little if no demand. The bank will not issue any more cheques, and ones already in circulation will not be honoured after October 1st.

Credit card cheques allow a cardholder to spend using their credit card in situations where plastic isn’t normally accepted, such as paying bills by post, although credit stacked up in this way is usually charged at a far higher interest rate than the normal purchase APR, a fact that many consumer groups say isn’t made clear enough.

The practice of sending out cheques which a customer hasn’t asked for, which has been used by several other providers, also came under scrutiny from the Dept of Trade and Industry and is likely to be banned when the DTI reports in a few months time.

RBS temporarily suspended the issue of cheques at the start of this year, and said that the suspension would noe be permanent as the negligible demand for them meant it was not viable to continue.

This entry was posted on Saturday, September 2nd, 2006 at 2:08 pm and is filed under General Credit Card News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.