If you have credit cards and a good credit score, you probably get numerous special offers in the mail on a regular basis from your credit card issuer. These offers may include shortened applications for pre-approved credit cards or convenience checks (credit card checks). These checks are linked to your credit card account and the credit card issuing company may send you these from time to time. As long as a business or retailer accepts these, they can be used for just about anything.

What Exactly Are They?

If you haven’t heard of these before, they are very similar in appearance to your personal checks. In addition to using these for making purchases, you can use them for cash advances, provided your credit card company allows that. Convenience checks can be very enticing, especially if you ever get strapped for cash. However, it is important to be aware of the advantages and disadvantages of using them before you do.

How Do They Work?

Convenience checks function in similar fashion to regular checks with one key exception – they add money to the balance on your credit card account whereas money is automatically taken from your checking account when you write a personal check. Credit card checks have an expiration date just like your credit cards do so if you are going to use them, you have to before they expire. Unfortunately, these checks do not come without fees.

When to Use Convenience Checks

There are two situations that do call for using convenience checks:

• Use them for balance transfers – if you want to consolidate some of your debt and lower your interest payments, you can transfer one credit card balance to another.

• Use them when credit cards cannot be used – if you are doing business with a company or contractor, you can use these checks (or cash) when the company or individual doesn’t take credit cards.

Disadvantages of Using Convenience Checks

There are three key disadvantages to using convenience checks:

• High fees of 3% to up to 5%.  This is a one time charge.

• Higher interest rate. You will be charged the same interest rate as a cash advance which is typically higher than your regular APR. Also, like a cash advance, there is no grace period and interest will be charged as soon as the check clears.

• Provides considerably less purchase protection.  The purchase protection that frequently comes with using your card that is insures against a defective item is not extended when you use a convenience check.

Additional Considerations

Convenience or credit card checks have to be used with caution and must be used responsibly. You should always contact your credit card issuer about the fees and interest involved prior to using one of these checks. Your next step is to develop a plan for paying back that portion of the balance on your credit card as quickly as possible. The best course of action where these types of checks are concerned is to only use them as a last resort after exhausting all of your other options.

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