A UK banking giant is set to scrap expensive credit card cheques, leading to calls for other lenders to follow suit, Reuters reported. The Royal Bank of Scotland (RBS), Europe's second largest bank and the world's fifth biggest, will withdraw credit card cheques at the end of September. It is the first to do so since the Department of Trade and Industry opened a consultation on measures to improve the transparency of credit card cheques in November last year. It is due to announce the findings of its enquiry shortly. Nick White, head of personal finance at price comparison service uSwitch.com, said the RBS move was "certainly a step in the right direction and one which we hope other providers will follow. "It's good news to see that one of the largest credit card providers in the country is leading the way by ending this practice for both new and existing customers," he said. In January, RBS and its NatWest subsidiary stopped sending out the cheques unsolicited. White said the bank's decision to stop issuing them altogether was "tantamount to an admission that it's only commercially viable for the banks to do so if they can send them out unsolicited -- encouraging customers to use them who otherwise would not." Credit card cheques have long been regarded as one of the key contributors to a rise in bad debt, which has been increasingly eating into banks' profits. RBS' bad debt charge in its retail markets unit rose 19 percent to 680 million pounds in the six months to end-June, continuing a trend among banks showing consumers are struggling to pay back unsecured loans. Credit card companies send out thousands of unsolicited credit card cheques every year. They allow consumers to draw money from an existing credit card account, and can be useful to buy goods or services from organisations that do not accept credit cards, or pay cash into a bank account. But the cheques come with a host of hidden charges and higher interest rates than those normally levied on credit card transactions. Some lenders charge an annual percentage rate of more than 20 percent on purchases made using credit card cheques, according to data from price comparison service Moneysupermarket.com. Users often find there is no interest-free period, compared to a typical 56 days on credit card spending, and can also be hit with an additional "handling" fee. The news came a day after APACS, the UK payments association, launched a new credit card cheque summary box. The information box, which will accompany all credit card cheques sent out in the UK by the end of the year, aims to spell out the terms and conditions, such as interest rate and other charges, at a glance.