Capital One - Too good to be true!?

skydancer

I've been a Cap 1 Silver card holder for a couple of years and have always paid off my balance in full every month. Last week Cap 1 sent me a book containing five "credit card" cheques. The enclosed literature explained that the cheques may be used for any purpose, and that debits relating to cheques will be treated as normal credit card debits - just as if I had used my card on a purchase.

The first cheque had been pre printed by Cap 1 and made payable to me for the sum of £500. Assuming that there must be a catch, I telephoned Cap 1(freephone, of course) to check my understanding, and was assured that I could bank the cheque immediately without incurring the immediate (and higher rate) interest, and that the £500 would simply appear on my statement and only attract any interest if I did not pay off the full balance when next due.

If this really is the case, I intend to max out my card each month on payments to my bank, collect the interest for a month thanks to Capital 1, and then pay off my balance in full with the money they kindly loaned me for nothing! Have I misunderstood this, or have they just provided a loophole which enables free cash loans?

zcaprd7

Sounds OK - I imagine they think most people won't bother to get a 56 day 0% loan (or whatever the grace period is)?

Gotabiscuit

Providing they are definitely treating the cheques as purchases, there is no catch and they're perfect for cleverly timed short-term stoozing.

I do it with my mine all the time - and they keep sending me more cheques.

sleepless_saver

Also good for longer term stoozing. I've been using mine to pay money into savings accounts, then I move the debt from Cap 1 to a 0% card. They do just keep sending them!

Just be absolutely sure that the cheques are treated as purchases not cash advances. I think they do issue both kinds.

moneyfun_2

Been doing this for over 18 months with Capital one, I use the cheques each month - cash up to my credit limit (which is excellent) pay the money into my Offset Mortgage account and then use a 0% interest card to pay it off and keep it in my Mortgage account helping pay off my mortgage thank you very much nicely.

I had to pinch myself that they would allow me to keep doing this, but it works brilliantly and doesn't cost me a penny extra to do.

TonyB

My goodness, Thanks for this topic! I was this morning replying to say that I had been using these cheques for years (since 1998) for my stock in my then business. The delay in payment meant that as long as 60% of the stock was sold then I covered the full payment settlement figure. With a £10k limit this was tremendously useful.
However you must read the small print carefully as there are 3 different types each identified by a letter in top right corner - details usually appear in front of cheque book & from experience 'P' is the one to use as no charges are made if full balance is paid by due date.
Why 'thank goodness?' Well I rang Cap1 to confirm the above & in doing so found that for the first time ever I had missed making a £70 balance payment last month putting my card in arrear & as the online transfer to settle the balance I made on 26/2 would not clear until this Friday the Cap1 cheque I had written 28/2 & paid into bank would be retuned!
ruining my credit rating!
Fortunatelly I found a sympathetic assistant who worked the oracle & arranged that the cheque would be met! Good for Cap1.

xycom1

I received a book of cheques like the OP, with the first cheque pre-preprinted with £500 and my name. I banked it a couple of months ago, and today received a grovelling apology letter from Capital One stating that the issue of pre-printed cheques (such as the one that I received and banked) was in contravention of the Banking Code.

The letter says that I need to 'take no action' and that I can call them free if I have any queries about the matter.

Is there anything I can get out of this? Do they owe me any compensation or anything? Or are they just trying to keep me settled so I don't make a complaint to the financial ombudsman for their breach of the Banking Code?