MBNA drops credit card cheques

One leading credit card company has announced this week that it is to stop issuing credit card cheques.

The cheques have been heavily criticised in recent years for the high rates of interest charged on borrowing.

They have also been accused of encouraging people already in personal debt and struggling with other financial problems to carry on spending, either by boosting their own finances or allowing them to juggle unsustainable debts.

But most condemned of all has been the practice of card companies sending them unsolicited to customers, encouraging the most financially vulnerable to spend without understanding what they are getting themselves in to.

MBNA is to stop issuing credit card cheques from the end of March.

The move has been welcomed by commentators.

Atlantic director Vance Parsons says: "Credit card debt has become a fairly political matter of late and introducing more consumer protection seems to be very much on the agenda."

He says: "There needs to be a balance between a 'nanny state' and consumer taking responsibility for understanding the risks of using credit card cheques, only paying minimum payments and switching balances, with the potential for creating a debt spiral."

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