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Convenience checks are checks that the credit card companies send you to allow you to write checks using your line of credit. If you carry a credit card it’s more than likely that you’ve received these checks to use from your card company in the past, probably when you first received your card.
Although this may seem like a convenient way to pay the bills, these checks are actually laced with nasty hidden fees. These fees end up costing you much more than if you just used your card to make the purchase. Unlike purchases you make with your card, you will start to be charged interest on the balance from the checks instantly.
On top of the interest that begins to accumulate immediately, many card companies charge an instant fee of 2 – 5% of the check amount.
If you’re already carrying a large balance on your card, DO NOT even touch these checks because you will not be able to pay off the balance from the checks until your existing balance is paid off. So if you’re carrying a $5000 balance on your card already, and you spend $300 with the convenience checks, you won’t be able to pay off the $300 balance until you pay off that $5000 existing balance! The danger in this is that if the check has a 0% introductory rate, and you get stuck in this trap and cant pay off the balance, you’ll have to pay all of the back-dated interest.
Anyway you really look at it, convenience checks just aren’t worth it. To find out the specific terms and conditions associated with your checks you’ll have to contact the card company because they won’t be listed on the check itself.
If you decide to get rid of your convenience checks, be sure to shred them! Always! Always! Always! make sure to shred them, if you don’t you can risk identity theft. These checks can be instant access to your line of credit for anyone who gets their hands on them.