Convenience Checks – Approach with Caution
How would you like to receive a blank check in the mail to be used at your disposal for anything you would like? Well, if you are a credit cardholder, chances are you’ve already received such a check at the same time or another from your credit card company. That sexy slide of paper (or heaps of slides of paper) you’ve probably gotten in the mail is referred to as a convenience check, and though it may be tempting to use it to pay off one of your bills, it’s important to understand that they are often not quite as convenient as their title may suggest. In fact, the expression is outright misleading, since using convenience checks usually carries significant costs and hidden fees that make them far riskier than they are rewarding.
So What Is a Convenience Check, and Why Should I Avoid Using It?
A convenience check is a allegedly free, typically unsolicited check sent to cardholders, often attached with a letter in the card issuer saying that the check may be used to”repay other debts” or”consolidate your outstanding credit card accounts.” The check acts as a sort of cash advance on your credit card, allowing you to borrow money directly from your credit. Nowadays, cardholders get these checks within mere weeks of opening an account, and they are also common to see at mailboxes near holiday shopping seasons 소액결제 현금화 80. Though they may seem to be ordinary, reliable checks that may help out when cash is tight, the simple truth is that using these checks will probably further complicate one’s financial problems instead of help them.
Probably the very decidedly inconvenient characteristic of a convenience check is the absence of a grace period for cash advances on a credit card, meaning that the check begins to accrue interest on the balance immediately from the time it’s drawn. It also does not help that they qualify for the highest interest rate applied to cash advances, which makes them much more expensive to use than somebody may initially think. Rates of interest can hover around 20% or more. On top of this, many issuers charge exorbitant fees simply to issue the check; these fees can often range from 2% to 5 percent of the total check amount. It is also not unusual for agreements to stipulate which cardholders have to be responsible for the total amount of the check, unlike the $50 liability limit on a stolen or illegal use of a credit card. Whereas with a credit card, damaged or stolen items may often be replaced, convenience checks offer little to none of the identical purchase protection.
Little by little, these costs add up to a unsolicited mess that seems designed to mislead and frustrate consumers. Very little that entails the use of convenience checks is notably convenient, as the issuer will often review a cardholder’s credit history as soon as he or she attempts to use a check. In case the business determines that the cardholder is using an excessive amount of credit for purchases, it can decline authorization to utilize the convenience check, putting the consumer in a difficult fiscal situation. Consumers’ credit card statements are also often attached with convenience checks in the email, which makes them easy targets for thieves. In case the issuer takes the consumer’s usage of the check and the check doesn’t get stolen from your unlocked mailbox, then you will only have the above interest and fees to be worried about. Needless to say, you need to attempt and avoid using convenience checks entirely. If you are in need of fast money, it’s significantly less risky to consider taking a payday advance.