Convenience Checks – Approach with Caution
How do you prefer to receive a clean check in the email to be used at your disposal for whatever you’d like? Well, if you are a credit cardholder, chances are you’ve already obtained 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 have likely gotten in the mail is called a convenience check, and though it may be tempting to use it in order to cover off one of your bills, it’s important to understand that they are often not nearly as suitable as their name may suggest. In reality, the expression is outright misleading, since using convenience checks usually carries significant costs and hidden fees which make them much riskier than they are rewarding.
So What Is a Convenience Check, and Why Should I Avoid Using It?
A convenience check is an supposedly 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”consolidate your outstanding credit card accounts.” The check functions as a sort of cash advance on your credit card, allowing you to borrow money directly from the credit. 소액결제 현금화 방법 Nowadays, cardholders receive these checks within fourteen days of opening an account, and they are also common to see at mailboxes near holiday shopping seasons. Though they may seem to be normal, reliable checks that can help out when money is tight, the simple truth is that using these checks will probably further complicate one’s financial problems instead of help alleviate them.
Probably the most decidedly inconvenient feature of a convenience check is the lack of a grace period for cash advances on a credit card, meaning the check begins to pay interest on the balance instantly from the time it’s drawn. It also doesn’t help that they qualify for the highest interest rate applied to cash advances, making them a great deal more costly to use than somebody may initially think. Interest rates can hover around 20 percent or more. In addition to this, many issuers charge exorbitant fees simply to issue the check; these fees can often vary from 2% to 5% of the entire check amount. It’s also not unusual for arrangements to stipulate that cardholders have to be responsible for the entire amount of the check, unlike the $50 liability limit on a stolen or unlawful use of a credit card. Whereas having a credit card, stolen or damaged items can often be substituted, convenience checks provide small to none of the same buy protection.
Very little that involves the use of convenience checks is especially convenient, since the issuer will often review a cardholder’s credit history the moment he or she tries to utilize a check. If the business decides that the cardholder is using too much credit for purchases, it can decline consent to utilize the convenience check, placing the customer in a difficult fiscal situation. Consumers’ credit card statements are also often attached with convenience checks in the mail, making them easy targets for thieves. In case the issuer takes the consumer’s use of this check and the check will not get stolen from the unlocked mailbox, then you’ll only have the above interest and fees to worry about. Obviously, you should attempt to avoid using convenience checks entirely. If you are in need of fast cash, it’s significantly less risky to consider taking out a payday loan.