Credit Card Cheque

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A Credit Card Cheque is a feature offered by Banks to its Credit Card Customers. As the name suggests, a managers cheque is issued in favor of a third party as per the customer request. For instance a customer may want to pay his childrens school fees but generally Credit Card payment is not allowed by schools forcing parents to pay cash or a cheque.

In such a situation, a Credit Card Cheque helps wherein the Credit Card is debited with the amount to be paid and a Managers cheque is issued in favor of the school. This will be help the customer as he may not be in a position to pay cash or might be in a difficult financial situation wherein this will act as a savior and allow the customer to pay the fees. A Credit Card Cheque can also be used to pay Rent or insurance premium or making a payment for buying a car.

Some customers use this feature for their own benefit wherein they request the Bank to issue a Credit Card Cheque in favor of their friend or relative and later ask them to deposit it in their account and withdraw cash from their. (The only negative aspect or risk involved is that customer's friend or relative might change his mind and refuse to withdraw and provide cash to customer). This generally does not happen but may happen so choose the name of the person very carefully.

The interest levied by the Bank on a Credit Card Cheque is higher than the retail transactions but lower than a cash withdrawal. As mentioned in my earlier blog, withdrawing cash from a Credit Card is the worst thing an individual can do as Banks do not clear the cash outstanding until the complete credit card is settled and interest is levied from the date of withdrawal till the complete outstanding is paid, also interest is compounded which makes the interest outstanding really really high. To avoid such a situation, a credit card cheque can be taken and interest can be paid as per the rate agreed with the Bank.

Also, a processing fee is levied  by Banks to make more money from customers and a cancellation charge is also levied incase customer changes his mind to cancel the cheque once it is issued. Details of charges that will be levied by the Bank are mentioned at the time of availing any product and are also available on the Banks website for easy reference.

Terms and conditions pertaining to any product are also available on the Banks website which are subject to change with or without any notice to customer. Finally, instead of withdrawing cash it is advisable to utilize such products offered by your Banks only incase of financial emergencies and these products should not be used to fulfill one's wants.