A UK banking giant is set to scrap expensive credit card cheques, leading to calls for other lenders to follow suit. The Royal Bank of Scotland (RBS), Europe's second largest bank and the world's fifth biggest, will withdraw credit card cheques at the end of September.
It is the first to do so since the Department of Trade and Industry opened a consultation on measures to improve the transparency of credit card cheques in November last year. It is due to announce the findings of its enquiry shortly.
Nick White, head of personal finance at price comparison service uSwitch.com, said the RBS move was "certainly a step in the right direction and one which we hope other providers will follow.
"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," he said.
In January, RBS and its NatWest subsidiary stopped sending out the cheques unsolicited.
Credit card cheques have long been regarded as one of the key contributors to a rise in bad debt, which has been increasingly eating into banks' profits.
RBS' bad debt charge in its retail markets unit rose 19 percent to 680 million pounds in the six months to end-June, continuing a trend among banks showing consumers are struggling to pay back unsecured loans.
Credit card companies send out thousands of unsolicited credit card cheques every year.
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