Battle Of Financial Options: Credit Card Vs. Credit Card Cheques

A credit account allows individuals to borrow money for a fee. Specifically, an individual will have a credit account with a set amount they can borrow. The way in which they borrow this money and what they use the account for is virtually limitless, as long as it is not linked to a specific store’s credit. Simply staying within the usage and finance limits is really the only general requirement of this card, as well as making the payments. Credit accounts are beneficial because they allow individuals to pay back their debt incrementally. The fees, however, can raise the cost of the original borrowed amount and that means more money spent in the long run.

Credit Card

One of the most common forms of payment linked to a credit account is a credit card. These look like any other type of card you may use and fit in a wallet for easy access. The credit card is presented for the purchasing of goods or the account number displayed can be utilized for online purchases. There are usually no direct fees associated for usage. Swipe fees can be assessed but, especially on major credit card lines, these are very low and a rarity. Charges will apply for late payments and overuse, but this is standard as well.

Credit Card Cheques

Another way that a credit card or credit check can be utilized is for a cash back option. In this, a credit account’s remaining free balance, the monies not used up to the maximum, can be withdrawn in the form of cash. This option is not available on all cards. Sometimes, though, the credit company will offer this cash back balance in the form of credit card cheques. The cheques are cashed and the account holder can use this cash for other items. When the cash back option is utilized in this way, the fees associated and the amount of the check would be added to the account balance. It is not, then, free money. The use of credit card cheques used to be a very popular way of gaining access to credit card cash, however, in recent years it has become a less utilized means.

Credit Cards v. Credit Card Cheques

The cash back option would seem very appealing to most. It would provide cash in the pocket instead of on the card. Why, then, are less and less credit card cheques being issued or even being offered? The reason is multi-fold. First, cheques often have large fees associated with them. Account holders found themselves being faced with additional payback requirements because of the use of these cheque options. Further, many credit account providers were finding that it was more difficult to have monies paid back on a card when this means was utilized. It serves as a higher risk line of credit and a card provider will want to avoid and minimize these risks where they can. The lending and borrowing field is already home to this game of chance so upping it through a service like credit card cheques is not always worth it.