uSwitch is concerned about consumers’ use of credit card cheques.

Credit card cheques are increasingly being used to pay utility bills, consolidate consumer debt and pay money into bank accounts – in 2008 alone, £3.6 billion was spent by customers using credit cheques totalling more than £571 million in handling fees and interest, according to uSwitch.com.

In total, 280m credit card cheques have been sent to the UK public this year – 97% of which were unsolicited – and 3.2m of these were used by consumers.

Around 130,000 people used the cheques to consolidate their debts, almost 300,000 used them to pay utility bills, while 23% of those surveyed used the cheques to transfer money into their current accounts.

uSwitch is concerned that the majority of people do not ask to be sent these cheques and do not understand the fees and interest amounts, leaving them vulnerable to high charges. In addition, the cheques do not offer consumers the same protection as a credit card.

In light of these concerns, the organisation is calling for a ban on these unsolicited mailings. Louise Bond, Personal Finance Manager at uSwitch.com, said: “It is both alarming and concerning that so many consumers believe these cheques are ‘friendly freebies’. There are huge fees and interest rates associated with using them, which consumers need to be more aware of – particularly if they are using them to pay household bills or consolidate any debts.

“The concern is that more people could turn to them in the run up to Christmas, and over the next year, as the recession begins to set in and consumers find themselves more cash strapped. However these quick fix solutions could turn into serious financial hangovers as they are one of the most expensive ways for people to get their hands on cash.”

uSwitch.com is a free, impartial online and telephone comparison and switching service for the UK public.