If you have ever used credit card convenience checks then you are aware of the many pitfalls that are
associated with them. They are called convenience checks because consumers can use them to pay for things
that can not be paid for with their credit card, such as a down payment on a vehicle. Unfortunately, many
find that they are more of an inconvenience than they are worth.
Credit card convenience checks work the same way as the ones issued from your bank with the exception
that they are cashed against your credit card instead of your bank account. Sounds good right? Guess
again. The interest fees can be as high as twenty percent and they start accruing from the moment the
check is written. You may also be charged additional fees that are between two and five percent of the
total amount. It should also be noted that this amount is added to any balance that is already owed. Any
payment made will be applied to the balance that you had before you wrote the check. This means that you
will continue to accrue charges on the higher interest rate.
There is no fraud protection coverage with credit card convenience checks either. You are responsible
for the entire amount regardless of who wrote them. Keep in mind that because there is no signature
verification required they are very easy for a thief to use. If this happens, you are stuck paying for a
check that you did not write and there is probably nothing you can do about it. This happens more than
anyone cares to admit. It has become such a serious problem that many states are considering banning them
completely.
Many people also use convenience checks to transfer the balance from a high interest credit card to
one with a lower introductory rate. Many of these introductory rates expire after a certain amount of
time. So, if the transferred balance is not paid before the introductory rate expires, the interest rate
could be higher than it was originally. Being late with a payment or missing a payment altogether could
also nullify the lower rate.
Credit card companies do not go out of their way to make sure consumers know the complete terms and
conditions associated with credit card convenience checks. You really have to thoroughly read the fine
print of your contract. Make sure you are aware of even the smallest catch before you even think about
using them. If you do decide to use them, use them wisely and only in the case of an emergency.
