New clause 3 - CREDIT TOKENS
Consumer Credit Bill
6:00 pm
Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)
I beg to move, That the clause be read a Second time.
Although the new clause refers to credit card tokens, it concerns the issue of credit card cheques, which was raised several times on Second Reading in this Parliament and in the previous Parliament. The new clause is a simple, probing new clause. It is designed to outline our dissatisfaction with how credit card cheques work and to see whether something can be done to tighten the process up in the interests of the consumer.
The new clause is intended to stop the sending of unsolicited credit card cheques. I accept that some have some benefit. For example, in buying something, there is no transaction fee. If one uses a credit card to buy something, one sometimes pays a transaction fee to use the card; with a cheque that does not apply. It is also useful when someone needs money desperately: perhaps the plumber has come to do some emergency repairs, but will not take a credit card. A credit card cheque makes it possible to settle that bill without taking the money directly from one's account.
However, there is a great temptation to overspend. The credit card cheques are not time limited and can sit in a drawer for year after year, until, when times get a bit tough, they can be used. People might be inclined to use them at times when they are not thinking of the consequences. I recognise, however, that people cannot spend beyond their existing credit limit. [Interruption.] I am sorry that the hon. Member for Eccles (Ian Stewart) is finding this a bit tiresome, but it is important. I noticed that he was yawning while the Minister was speaking, too, so it is not just me.