Credit Card Quick

Are Credit Card Convenience Checks all they’re Cracked up to be?

Credit Card Rewards

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.

Three Ways to Beat the Credit Card Game

Introduction

Credit cards can be your best friend, and your worst enemy. For those who have mastered the credit card game, credit cards are merely a convenience, and one that they certainly never rely on. Mindful, responsible spending and a serious commitment to paying off your credit card debt in a reasonable amount of time will save you from credit card problems, thereby helping you to become financially independent and not bogged down in credit card debt.

How to Beat the Creditors at their own Game:

• Did you ever hear the saying that the best way to achieve a zero percent interest rate on your credit card is to simply not have a balance? Listen, credit cards more than serve their purpose, for a multitude of reasons; however, when you find yourself purchasing things that you know darn well you will not be able to pay off in the near future then it is time to rethink your attitude towards credit card debt.

For starters, make a budget and stick to it. That will allow you to estimate what you can afford to charge each month and pay off each month. Next, before you whip out your credit card to make a purchase, simply take a moment or two and ask yourself if you really need this item, or if it an impulse purchase.

• Consolidate your debts onto one, manageable credit card and then cut up all of the other ones. One of the biggest mistakes consumers make is to consolidate their credit cards and then simply charge them back up again. You must make a conscience decision once you have consolidated your debt to no longer use those cards that got you into trouble in the first place.
• Negotiate the terms of your credit cards. It is not uncommon to see interest rates skyrocketing and credit limits being slashed, as the new credit card legislation has prompted many creditors to stick it to their customers in hopes of recouping some of their losses. However, if you notice you APR on the rise or your credit limit being cut, immediately contact your creditor to remind them that you have been a loyal, responsible customer and that you expect the changes to be reversed. If they are unwilling to negotiate with you regarding the terms of your credit card then it may be time to move on.

How to Compare Balance Transfer Credit Card Offers

Choosing Credit Card

If you have debt from different sources and are looking to consolidate that debt onto one, manageable card, then you may have considered a balance transfer offer from your credit card. Although balance transfer offers aren’t as plentiful as they once were, consumers can still find good deals on balance transfer offers if they have the good credit to back it up.

It is important to note, however, that all balance transfer offers are not created equal. Don’t get pulled into a credit card’s balance transfer offer by promises of low introductory interest rates and loads of hype; instead, carefully read each card’s terms and conditions regarding the balance transfer offer so that you can make the best decision.

What to Look for in a Balance Transfer Credit Card Offer:

• Introductory Period – A flashy introductory period is what often pulls consumers into choosing one balance transfer credit card over another. However, introductory periods, however fantastic are just that: introductory. In other words, don’t just look at the great introductory rate; look at the length of that introductory rate so that you can determine if the card’s terms are right for you. For example, a 3.9% introductory rate for 12 months may be better than a 0% introductory period for 6 months.
• Interest Rate – One of the most important considerations when choosing a balance transfer offer from a credit card is the card’s interest rate, once the introductory period has ended. A fantastic, low introductory rate may not do you much good if you still have a balance and the rate just jumped to 20 percent. Don’t get caught with a high interest rate credit card once the introductory period ends; instead, pay close attention to the card’s interest rate so that you won’t pay big in interest charges.
• Balance Transfer Fees – Balance transfer fees are those pesky, often-hidden fees associated with balance transfer offers. Balance transfer fees can add up to hundreds of dollars and are typically calculated as a percentage of the overall balance you will be transferring. It is important to remember that balance transfer fees can vary widely from one card to the next, so it pays to shop around for a balance transfer offer that’s right for you.
• APR for Purchases and Cash Advances – Always remember that your balance transfer rate often doesn’t apply to purchases and cash advances, so make sure you understand this before making any purchases or cash advances on your balance transfer credit card.