credit card cheques

debs626

Have just received some credit card cheques from the Halifax

Their 4.94%pa for 6 months then 21.95% pa after.

I'm thinking of buying a camera on my C Card do you think I should use the cheque instead?

there is a 3% (min #3) handeling charge.

Is there a catch ??

Redrum_2

debs626 wrote:

Is there a catch ??

I believe there's a couple

- the 3% charge is because credit card cheques are treated as cash transactions so accrue interest immediately from day 1 with no interest-free period (at 4.9 maybe no so much of an issue but worth baring in mind

- when you buy someting with a credit card cheque, Section 75 of the Consumer Credit Act doesn't apply, which would otherwise cover you if something went wrong with your purchase, if you used your card

Although there's some debate about the last point, with some issuers claiming it does apply

Check out this link for more info http://money.guardian.co.uk/creditanddebt/creditcards/story/0,,1863080,00.html

The_Boss

To sum up, basically if you use the cheques, you will pay 4.94% on the purchase and incur a 3% fee.

The big catch is if you make a big purchase or choose to make a cheque out to yourself, you need to take into account how much the fee is otherwise you could go over your credit limit and incur fees.

bristol_pilot

It's quite a bad deal, credit card cheques are good for lighting fires with and not much else. Why not get a credit card that gives 0% on purchases and buy the camera with that?

The_Boss

Yeah, if it was for life then they would be a better option, but the biggest catch is to attract people with the low interest rate and then hope they dont pay it off before the bigger limit kicks in.

YorkshireBoy

If you already have a balance on the card, or use the card for purchases after writing the cheque, then the chances are that any payments you make will go towards the 4.94% APR debt first.

This means that the aforementioned existing, and new purchase, balances will accrue interest at (possibly) 16.9% APR+ until the camera purchase cost is repaid in full.

Check your T&C's, looking for 'order/allocation of payments', for further details.