Those oh-so-tempting convenience checks that credit card issuers stuff in card statements and other mailings can lead to a whole lot of debt in a hurry.
“They are very, very tempting,” says John Ulzheimer, president of consumer education at “They can act as the crack cocaine of the credit card world if you’re not careful.”
Here’s why.
A convenience check, also called a credit card check, is linked to a consumer’s credit card account and can be used to make purchases or take cash advances with the credit card.
To make a purchase, simply write a check for the purchase amount to a merchant and sign the check. Your credit card company pays the merchant when the check is cashed, and the amount of the check is deducted from your card’s credit line.
Write a check to yourself and cash it — you’re now using a convenience check as a cash advance.
Using a convenience check, or two or three, for purchases or cash advances can wipe out your credit line pretty fast.
The interest rate you pay on a convenience check could be twice as high as the rate you would pay for a credit card purchase, and you also will be charged a fee, typically 3 percent or 4 percent of the amount that you borrow.