Unsolicited credit card cheques

Using one is like taking a cash advance against your credit.



Online only.


Are unsolicited credit card cheques still arriving at a mailbox near you? Each time I get a small envelope containing these “convenient” ways to get further into debt I cringe. Not because I’m going to use them. I’m smarter than that. But a lot of people don’t realize that when you use them, it’s like taking a cash advance against your credit card.

What does that mean for the unsuspecting user of these “convenient” credit card cheques? First, interest starts to accumulate immediately since there is no grace period on cash advances. Second, cash advances often come with a much higher interest rate than normal retail purchases made on a credit card. With a higher interest rate, costs go up and the time it takes to get to debt-free forever lengthens, both of which make the folks who fall prey to these cheques extremely profitable.

The federal government has been promising to stop these credit card cheques from being sent to customers if they haven’t specifically been requested. And yet they keep arriving. Have the feds dropped the ball? Or are credit card companies simply not following the rules? Or is it a case where the feds dragging their feet serves the special interest groups that would like to see this proposed new legislation take a long time to become law?

The promise to regulate a ban on credit card companies sending unsolicited cheques to customers came in the 2011 federal budget. How long can it possibly take to implement? Is the government being lobbied so hard that it’s using delay tactics to let credit card companies get their last licks in? Perhaps.

According to the Department of Finance website (as seen on May 13, 2012):

“The Government proposes to ban the distribution of unsolicited credit card cheques by federal financial institutions… These proposed regulations will be published for consultation in the coming weeks.”

What’s to consult? Either they are going to ban the suckers or they’re not. Of course, every time they get a little closer to the actual ban, the media picks up the story and talks about what progress this is, and the feds get more positive airtime. Meanwhile, I’m still getting those damn cheques.

4 comments on “Unsolicited credit card cheques

  1. someone wrote a blog about those and they just called their CC company and asked that they not receive them anymore. Apparently they're printed by a third party company, so it takes a while for the stop to take place, but I did this and haven't received any since.


  2. I did receive some of these last year from Amex but they were indicating that the interest rate would be at 1.99% for a set term which was way lower than my comparable unsecured line of credit. I checked with a small amount and noticed, as promised, the interest was only applied to the cheque amount and did not include any new purchases. In this case, I required a small amount to cover an unavoidable expense and charged me a rate lower than what I would have paid using conventional methods. BTW, I paid off the amount before the set term expired thus saving $.


  3. Like many other Canadian consumers i now, at urging of my banking & credit card institutions, subscribe to online 'e' statements in order to cut down on paper mail.
    Against my wishes these same institutions continue to send me cheques which usually come with a limited time, low interest offer of about 2.99%. Their hope is I will use the cheque and have a (the larger the better) balance when the "limited time" expires and the 19.9% -28% interest rate kicks in.


  4. a higher interest rate??? are you kidding me, they only offer lower rate on those mail, and some times ZERO!


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