Cheques checking out

 

 

Cheques will be phased out by October 31 2018, the UK’s Payments Council has announced. The 15-strong body, comprising members of the banking industry, said cheques were in “long-term, terminal decline”. Chief executive Paul Smee said: “There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement.”

The council faced opposition from businesses and charities who argued that when individuals can no longer use cheques to make payments or donations they will loose money and much needed contributions. Personally I very rarely use a credit card and certainly not a debit card when making contributions to charities by post.

The Payments Council have vowed to work over the next nine years to “promote and explain” the alternatives to the public and their goal is to ensure that by the cheques death knell in 2018 there will be no scenario where customers still need to use a cheque.

Despite the decline in the use of cheques from approximately 10.9 million per day in 1990 there are still approximately 4 million cheques used each day in 2008, clearly there is still a demand, although a declining demand by the public.

If cheques are removed from the system there has to be concerns that many will resort to paying by cash and keeping large sums at home with the increased risk of theft or exploitation of the more vulnerable in society. In addition for those who have been refused access to a credit card due to unemployment or retirement the humble cheque is a safe way to make transactions by post. For those who travel aboard the travellers cheque has often been a useful back up in the event of debit card faults, another avenue that the Payments Council will need to address by 2018.

Despite the Payments Council’s pledge, there is a danger that some members of society will be denied access to a safe and convenient method of making payments. Perhaps the banks need reminding that although we use their facilities they hold and use our money, they are there to serve us, the general public not the other way round.

Credit Cards

Since becoming unemployed, or rather retired I find that small, often insignificant situations become magnified out of all proportion.

 

I recently applied for a new credit card, in my naivety, I though that I had a good credit history. Never defaulted on my mortgage, any loans always paid promptly and in full. Previous credit card always paid on time, never exceeding the limit and the overdraft only used in emergencies.

 

Virgin money looked a good option so I applied on line; this is where the problem starts. Under employment I put retired and under income I enter my annual pension. The form will not accept this; neither will several other on line credit card applications. Virgin has a telephone number which I ring and speak to a very helpful operator who takes my details and tells me that he will process my application and I will receive a written reply within the next few days.

 

As promised I receive a letter from the Head of Credit, Ms Poole requesting that I contact their office, did alarm bells ring, no why should they, after all I am a good credit rise, aren’t I?

 

I phone and I am asked whether I have a mortgage protection?

 

“Yes, having paid it for 25 years I thought I should take advantage of the scheme”.

 

“Well you are unemployed so are not eligible”

 

“Yes technically I am unemployed but I am retired with a guaranteed annual income”

 

“But you are unemployed and therefore do not qualify, we have to be responsible when lending money and it wouldn’t be responsible lending to someone who is unemployed”

 

The delightful Ms Poole, Head of Credit confirmed this in writing, “We can’t offer you a credit card at the moment as you’re not in regular long-term employment. If your circumstances change and you’d like to reapply, we’d be happy to take another look at your application”

 

Perhaps I’m miraculously going to shed a few years and resume fulltime employment. One has to wonder whether fulltime employment is a safer option that a regular pension? Clearly it is. I guess that I will have to dust off the trusty cheque book, but even that has its limitations.