Convenience Checks – Approach with Caution
How do you prefer to receive a blank check in the mail for use at your disposal for whatever you’d like? Well, if you’re a credit cardholder, chances are you’ve already received such a check at one time or another from your credit card company. That sexy slide of newspaper (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 important to understand that they are often not quite as suitable as their title may suggest. In reality, the term is outright misleading, as the use of convenience checks generally carries significant expenses and hidden fees that make them much riskier than they are rewarding.
So What’s a Convenience Check, and Why Should I Avoid Using It?
A convenience check is an allegedly free, normally unsolicited check sent to cardholders, often attached with a letter in the card issuer stating that the check may be used to”pay down other debts” or”combine your credit card accounts.” The check functions as a sort of cash advance on your credit card, allowing you to borrow money directly from your credit. These days, cardholders get these checks within mere weeks of opening an account, and they’re also common to see at mailboxes near holiday shopping seasons 소액결제 현금화 방법. Though they may appear to be normal, dependable 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.
It also does not help that they qualify for the maximum interest rate applied to cash advances, making them a great deal more expensive to use than someone may originally think. Interest rates can hover around 20 percent 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 uncommon for agreements to stipulate that cardholders must be liable for the entire amount of the check, unlike the $50 liability limit on a stolen or illegal use of a credit card. Whereas having a credit card, stolen or damaged items may often be replaced, convenience checks provide small to none of the identical purchase protection.
Little by little, these costs add up to a unsolicited mess which seems designed to deceive and frustrate consumers. Very little that involves using convenience checks is notably convenient, as the issuer will often review a cardholder’s credit history as soon as he or she tries to utilize a check. In case the company determines that the cardholder is using too much credit for purchases, it can diminish consent to use the convenience check, placing the customer 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 this check and the check will not get stolen from the unlocked mailbox, then you will only have the aforementioned interest and fees to worry about. Obviously, you should try and avoid using convenience checks altogether. If you are in need of quick cash, it’s significantly less risky to contemplate taking a payday advance.