Convenience Checks - arrival with Caution
How would you like to receive a blank check in the mail to be used at your disposal for whatever you'd like? Well, if you're a reputation cardholder, chances are you've already received such a check at one time or an additional one from your reputation card company. That alluring slip of paper (or batch of slips of paper) you've probably gotten in the mail is called a convenience check, and although it may be tempting to use it to pay off one of your bills, it's foremost to understand that they are often not nearly as convenient as their name may suggest. In fact, the term is outright misleading, as the use of convenience checks usually carries valuable costs and hidden fees that make them far riskier than they are rewarding.
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So What Is a Convenience Check, and Why Should I Avoid Using It?
A convenience check is an assertedly free, usually unsolicited check mailed to cardholders, often attached with a letter from the card issuer stating that the check may be used to "pay down other debts" or "consolidate your excellent reputation card balances." The check acts as a kind of cash enlarge on your reputation card, allowing you to borrow money directly from your line of credit. Nowadays, cardholders receive these checks within mere weeks of opening an account, and they are also tasteless to see in mailboxes near holiday shopping seasons. Though they may appear to be normal, trustworthy checks that can help out when money is tight, the truth is that using these checks will probably further complicate one's financial difficulties rather than help alleviate them.
Probably the most decidedly inconvenient feature of a convenience check is the lack of a grace duration for cash advances on a reputation card, meaning the check begins to accrue interest on the equilibrium immediately from the time it is drawn. It also doesn't help that they qualify for the top interest rate applied to cash advances, making them much more high-priced to use than someone may initially think. Interest rates can hover nearby 20% or even more. On top of this, many issuers payment exorbitant fees just to issue the check; these fees can often range from 2% to 5% of the total check amount. It is also not uncommon for agreements to stipulate that cardholders must be responsible for the total whole of the check, unlike the liability limit on a stolen or unlawful use of a reputation card. Whereas with a reputation card, damaged or stolen items can often be replaced, convenience checks offer minute to none of the same purchase protection.
Little by little, these costs add up to an unsolicited mess that seems designed to mislead and frustrate consumers. Very minute that entails the use of convenience checks is notably convenient, as the issuer will often characterize a cardholder's reputation history as soon as he or she attempts to use a check. If the business decides that the cardholder is using too much reputation for purchases, it can decline authorization to use the convenience check, putting the buyer in a difficult financial situation. Consumers' credit card statements are also often attached with convenience checks in the mail, making them easy targets for thieves. If the issuer accepts the consumer's use of the check and the check doesn't get stolen from your unlocked mailbox, then you'll only have the aforementioned interest and fees to worry about. Needless to say, you should try to avoid using convenience checks altogether. If you're in need of quick cash, it is significantly less risky to think taking out a payday loan.
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