Convenience Checks

Published on: Mon, Aug 17, 2009

Classified as: Credit Cards, Tips & Advice

The associated card issuer, from time to time, issues convenience checks to credit cardholders by email. In fact, most consumers receive them at least once a month. Although these may seem tempting, and look like “free money”, they are far from it. Thus, make sure you understand all the terms and conditions before you use them.

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How Convenience Checks Work

It is possible to use convenience checks like any other check. You can give them to whoever accepts checks as payment, including merchants, family, friends, or yourself if you wish, to deposit funds into your own checking or savings account.

You can write the check for any amount up to your total available credit line, you will see a charge in your credit card transaction history after you post it. But if you write a check for an amount that is greater than your credit line, then it is possible that the check will bounce and you’ll have to pay a penalty fee and your APR may jump.

Convenience Check Fees and APR

Most of the convenience checks come with a fee. Many may offer 0% introductory APR for a few months as long as the checks are cashed by the date stated in the offer. Most of these convenience checks carry a fee which is usually about 3%, ranging between $5 and $99 which is similar to the cost of a balance transfer fee. Some convenience checks are also treated as cash advances, with an APR of 20% or more.

Convenience Checks are Fraudsters Favorites

Convenience checks require no signature verification, and can be stolen easily out of your mailbox or your trash can if you fail to shred them. This makes them a special favorite of most fraudsters. And the worst part is that many credit card issuers will hold you liable for the use of the checks, unlike the credit card fraud which is mostly covered by the issuer.

Convenience Checks are Convenient for Card Issuers

Credit card issuers send convenience checks to make the customers spend more money and pay more interest and associated fees. You can probably see advertisements set up by the credit card companies to use these checks to pay bills, go on vacation or buy a car, but the question is that should you use these blank checks which you get in your mail to use your credit line instead of using a credit card.

The card issuers simply want you to use them so that they can charge the extra 3% of the transaction plus finance charges if you don’t pay it off before the introductory period expires.

Thus, it is wise to use convenience checks only in the case of an emergency. Otherwise, they are just another way of making money by the card issuer and offer no great advantage.

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