Credit card cheques ‘key contributors to bad debt’

Nick White from the website urged other lenders to follow Natwest’s and the Royal Bank of Scotland’s example and stop the sending out of cheques.

“Credit card cheques have long been regarded as one of the key contributors to bad debt,” said Mr White.

“It’s good news to see that one of the largest credit card providers in the country is leading the way by ending this practice for both new and existing customers – this follows a temporary suspension earlier this year.”

Apacs, the UK’s payment clearance system, announced today that it is to bring in summary boxes for credit card cheques in a bid to stop people taking on debt they do not understand.

However, with bad debt cases soaring among banks, Mr White said that it is likely that credit card cheques will eventually disappear as people often fail to repay banks.

He also said that people were unaware of credit card cheque rates and called for government regulation to protect people from taking on too much debt.