Credit Card Cheques

What is a Credit Card Cheque?

Credit Card Cheques are as the name implies, cheque books issued on a Credit Card account by a fairly small number of card issuers. Often carrying administration fees of around £25 per cheque, and with interest charged at cash withdrawal rate, it is important to check the costs before you use them.

Credit card cheques are similar to cheques issued on current accounts. They are a means of paying for something when you don`t have cash and you can`t use your card, and can be made out to shops, tradesmen and anyone else you might pay with an ordinary cheque.

Instead of using a cheque guarantee card to back your purchase you use your credit card, and instead of the money coming from your current account it is charged to your credit card. It is important to note that a credit card cheque is not like a normal cheque. While the amount you spend with the credit card cheque is charged to your card, just as if you used the card in a shop to make a purchase, there are some crucial differences between how the transactions are treated by the card provider.

The main difference is the cost. For example, a customer with one of the main credit card providers, would pay no interest on purchases for the first three months they hold the card and 17.9% APR after that. If they used a credit card cheque their purchase would not be subject to the three-month introductory offer and would be treated as a Cash Advance, attracting an interest rate of 27.9%. To make matters worse, even if they paid off their balance in full when their statement arrived, the interest would have been mounting up since the day the cheque was handed over.

In contrast, on purchases made with the card they get up to 56 days interest-free added unless the balance is not repaid in full and on time.

Despite the extra cost, consumers who use cheques actually get less protection than those who pay by card. Transactions using credit card cheques are not covered by section 75 of the Consumer Credit Act 1974, which makes the card provider jointly liable if there is an error with something paid for by card. This is because the card issuer does not have a direct relationship with the supplier.

The introduction of Chip and PIN means if someone has already stolen or cloned your card they will find it much easier to use these cheques than to use your card in a store.


Q: Does anyone still use or accept cheques?

A: Yes- chequebooks were due to be phased out in 2018 due to lack of usage, but more than 500 million cheques were written in 2015, prompting MPs to reverse their decision.

Q: Are they secure?

A: Not entirely- if your card details have been stolen, the person with your details may be able to make payments from your account in-store if using a credit card cheque.

Q: How do I get them?

A: These days you are only issued them if you ask for them. Card providers will no longer provide them when you open an account.

Jargon Buster

Use the links below and the resulting list of terms on the right to locate the term you are looking for. If you can't locate it, please get in touch.

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
keyboard_arrow_left

keyboard_arrow_right

We are rated number 1 for customer service on