What are credit card convenience checks?

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What are convenience checks?

Convenience checks are associated with a customer’s credit card account and are used primarily to make purchases, balance transfers or acquire cash advances with the credit card. In order to make purchases with a convenience check all you have to do is write out a check for however much the cost is, add the merchant’s name and sign on the dotted line. The merchant receives cash when they go to get the check cashed and the amount is deducted from your credit line. Similarly, you can use convenience checks to get cash advances to by simply writing out a check for yourself.

The devil in disguise

Convenience checks may seem like life-savers but they will end up costing you a lot more than they’re worth. First of all, convenience checks charge an interest rate that is higher (and may even be double) than your regular credit card purchases. Secondly, you are not only charged the interest rate but also 3% to 4% of the amount that you use. Last but not least, convenience checks are extremely addicting and have been termed as the “crack cocaine of the credit card world”.

Credit card issuers typically offer limited time promotional packages to get you to develop the addictive habit of using convenience checks on a regular basis. Giving into the habit of using convenience checks may empty out your card’s credit line quickly.

Convenience checks are not all trouble if you use them properly and you can use them to your advantage. For example, you can pay off the accrued balance on another card that has a higher interest rate while the convenience check is bound by the promotional offer.

Convenience checks’ checklist

If you’re new at using convenience checks, you will want to go through this checklist before writing out a check:

  • What is the APR you will be paying on purchases, balance transfers and cash advances that are made with the convenience checks?
  • How much fees is charged against the convenience check?
  • What affect will using the convenience checks have on your card’s credit line?
  • How long is the promotional offer / grace period valid till?

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