press release

Press Release - 25/01/05

MONEYNET WARNS ON COSTLY CREDIT CARD CHEQUES

Online financial information service highlights dangers of using expensive credit card cheques.

MILLIONS of credit card cheques are currently being sent out as card firms hope customers will use them to settle expensive Christmas and New Year spending debts.

But Moneynet.co.uk today advises consumers to avoid using the cheques to consolidate other debts - as despite the encouragement of card firms, there is an expensive sting in the tail.

Mainstream cards offered by the likes of MBNA, Alliance & Leicester, Abbey, Barclaycard, NatWest, Virgin and Halifax* charge a 2 per cent handling fee for card cheques, and many firms now also impose a charge for balance transfers.

"Many people will be feeling the pinch as all the bills start to roll in, and will be tempted to use these cheques - but they could find it an expensive option," said Moneynet.co.uk chief executive Richard Brown.

"A two per cent fee is very hefty, and even if the card companies protest that there is a cap the more expensive ones can easily cost up to £35 for the privilege of writing a cheque. It would be cheaper to arrange an alternative form of borrowing," said Brown.

As well as the charge, credit card cheques can prove costly on purchases, as many also hit customers for APRs of 20 per cent and more.

"At four times the base rate, consumers may want to think twice before using these cheques," added Brown. "And don't forget, users also forfeit the benefit of the lengthy interest free periods available on standard credit card spending."

CARD CHEQUES - CHARGES (source: Moneynet.co.uk, Jan 2005)

MBNA

2% handling fee (min.£2, max.£35) on: credit card cheques and some balance transfers. You may be charged a fee for transferring a balance, unless you request a balance transfer online with your application.

ALLIANCE AND LEICESTER

2% handling fee (min.£2, max.£35) on: credit card cheques and some balance transfers.

ABBEY

2% (min.£2, max.£35) may apply when: you transfer balances and will always apply when you write a credit card cheque.

NATWEST

Cheques subject to a handling fee of 2% with a minimum of £1.50 and a maximum of £20, no details of any fees for balance transfers.

VIRGIN

2% handling fee (min.£2, max.£35) for: credit card cheques and some balance transfers.

CO-OPERATIVE BANK

2 per cent of value for: cheques, min. of £2 and £25 max

HALIFAX

Cheques Interest charged from date transaction is posted to account, 21.95% annual rate (1.667% monthly)

BARCLAYCARD

Cash, balance transfers and cheques: 2% (min. £2.00); 2.5% (min. £2.50)

PRESS ENQUIRIES

Richard Brown, Chief Executive, 0208 313 9030

David Andrews/Cathy Tully, David Andrews Media Ltd 07941 255855 / 01273 774109 / 07747196854

Consumer enquiries: info@moneynet.co.uk / www.moneynet.co.uk

Moneynet.co.uk is the UK's longest established online personal finance research and data analyst company. The company offers consumers a choice of thousands of low cost financial services products. From mortgages, personal loans to motor, home and medical insurance, credit cards, savings accounts and best buy fixed rate products, Moneynet is one of the most comprehensive online services of its kind in the UK. Founded by chief executive Richard Brown, the Moneynet brand is destined to become one of the UK's major players in consumer finance products.

A DAVID ANDREWS MEDIA LTD - RELEASE FEBRUARY 2005