Downside of Convenience Checks |
By Chris Buchheit on April 8, 2010
An Inconvenient Check
.jpg.aspx?width=75&height=75) You know those convenience checks that are included with your credit statements? Ironically, it turns out those checks are not convenient in the least. I know, imagine that!
You might be tempted into believing that these checks are a gift from the credit company – you don’t even have to sign them. Plus, you can make big-ticket purchases right off the bat. Nice.
What you might not realize is that convenience checks come with a cost other than the price tag of whatever you’re buying.
"The only convenience that I see is they're convenient for the creditor to make money," says Howard Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, Fla (Bankrate.com, 12th paragraph).
According to bankrate.com, convenience checks come with instant and steep negative impacts on your account. With each convenience check used, interest begins to accumulate immediately, often at very steep rates. We are talking around twenty percent. Most credit card companies also charge fees with these checks as well (Bankrate.com“A Very Pricey Purchase), but you will have to dig for that information.
But wait, it gets better!
If you use a convenience check, the normal consumer protection systems credit cards have do not apply. So if you buy that solid gold humvee you’ve been eyeballing for months, and it turns out that solid-gold cars are a horrible idea, the bank cannot help you return it. In that case you would have to battle it out with the people you gave your money to (Bankrate.com “Paying Without Protection”).
Not only are convenience checks financially risky, they can also lead to identity theft and credit fraud. As stated, often times signatures are not required when using convenience checks, and if you are not careful in disposing or using them, a thief could very easily gain access to your account. Once this problem occurs, it is often an incredibly lengthy process to solve.
One way to prevent this is to make sure these convenience checks are sufficiently shredded before disposing of them, should you choose not to make purchases with them (Bankrate.com “The Perfect Crime”).
In all honesty, the most convenient thing to do with convenience checks is to throw them away.
Note: Using convenience checks for purchases or transferring balances can lower your credit scores if you use a high percentage of your credit limit. |
Current Rating: 0 (0 ratings)