Are Credit Card Convenience Checks all they’re Cracked up to be?
Most of us are aware of those credit card convenience checks often sent to us by our credit card company. Sometimes they come with special rates and incentives, and many are sent right along with our credit card bill.
The checks are blank and ready to use. Sounds tempting, doesn’t it? A new pair of shoes, a weekend getaway or even a new vehicle is just a check away.
But before you start spending with your credit card’s convenience checks, you may want to take a step back and consider the advantages – and disadvantages – of credit card convenience checks.
Advantages
- Writing out a convenience check is often much easier than applying for a personal or car loan.
- Ideal for situations where a credit card would not or could not be used, such as paying a contractor.
- Often times, they come with promotional rates that are much better than the current interest rate on your credit card.
- Convenience checks may be an ideal way to consolidate your debt.
- Convenience checks may be useful for paying off medical debt, student loan debt or any other type of consumer debt.
- Convenience checks may be deposited into your bank account for cash.
Disadvantages
- Promotional rates on convenience checks are often short-lived. If you receive a great promotional rate on a convenience check, chances are you will not be able to pay off the debt before the promotional period ends.
- Convenience checks often come with fees. These fees can equal a percentage of the check’s total, or can be a straight fee, depending on the creditor and the offer. Keep these fees in mind when writing convenience checks, as they may outweigh the benefits of the promotional rate.
- Convenience checks may give the consumer a false sense of security when it comes to being able to pay off the debt. In other words, the sheer convenience of convenience checks may cause consumers to overspend when they might not have otherwise overspent.
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