Ask the expert

Add captcha
Enter the text shown above:

Can you explain how to use the convenience checks that come with credit card statements?

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

Question: Can you explain how to use the convenience checks that come with credit card statements?

Answer: The blank checks that come with your credit card statements are called convenience checks. Many consumers find it appealing to be able to write a check without the money coming out of your checking account. But this isn't free money. In fact, you should know that using convenience checks can become quite expensive because of the interest rate and fees.

To determine the real expense of using a convenience check, you need to read the terms and conditions of your disclosure statements. You'll find out if the checks are treated as a balance transfer or a cash advance. Usually, the amount of the check is treated as a cash advance. This has several disadvantages. First of all, you're going to pay the APR for cash advances, not the APR for purchases. For example, let's say your purchase APR is 15.99 percent, but the APR for cash advances is 25.99 percent.

The APR you'll be paying on the amount you wrote on your convenience check is 25.99 percent. Most cards also have a fee for getting a cash advance. This fee can range from 3 - 5 percent. So if you write a convenience check for $2,000 and the cash advance fee is 5 percent, you'd owe $2,100 right off the bat just for the "convenience" of using this check. Now think about the 25.99 percent APR you're paying on the $2,100 balance. And the interest starts accruing immediately--there's no grace period.

About the only time using a convenience check makes sense is if you're having a unique financial crisis due to cash flow issues. And I'd only recommend this approach if you know for certain you'll have the cash to pay it off very quickly.

0 Responses to "Can you explain how to use the convenience checks that come with credit card statements?"

No Comments

Leave a Comment
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here


Featured Partner Cards