Convenience Checks Aren’t So Convenient if They Lead to Unexpected Charges: What You Should Know Before Using Them

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You might be surprised to get a blank check from your credit card company.

These are called convenience checks, and while they make it easy for you to write a check against your credit limit, you could end up owing more money and deepening your debt. Before you use a convenience check, you’ll want to learn about the potential drawbacks and other factors involved.

What Is a Convenience Check? 

A convenience check is a check issued by your credit card company that can take the place of cash or a credit card. “You use it to cash out money tied to your available credit limit,” says Bola Sokunbi, certified financial education instructor, bestselling author, and founder of Clever Girl Finance.

It’s different from a bank check, which draws from the money you have in your bank account. When you use a convenience check, you’re basically taking a cash advance from your credit card issuer. But it’s similar in that “You can pretty much use the money for anything,” says Sokunbi.

This includes rent or other situations where you can’t use a credit card. “You can even use a convenience check as a way to pay a credit card with a credit card,” says Gina McKague, owner and founder at McKague Financial. In most situations, issuers won’t let you pay off a card directly with another card, but a convenience check makes this possible. It can get tricky, so make sure to consider each card’s APR as well as other fees and interest rates associated with this transaction.

For example, you’ll typically pay a higher interest rate for using a convenience check than you would for carrying a balance on your card. “They usually include either advance fees or possibly higher interest rates, and stricter repayment penalties,” says McKague. 

Can You Order Convenience Checks From Your Credit Card Company?

If your credit card company does issue convenience checks, you might receive them in the mail with your statement or as part of a promotional offer. “Other credit card companies are only going to offer them to cardholders with certain levels of creditworthiness based on your credit score,” says McKague. “But you can always call the number on the back of your credit card and request them.” 

If you do request them, ask if there’s an initiation fee to send them out, says McKague. You want to also ask about any fees associated with using the checks, beyond the interest rate, says McKague.

Drawbacks of Convenience Checks

Even with the benefits, using a convenience check can leave you with more debt than you can handle. “If you’re not careful how you use it, you could end up owing a considerable amount of interest,” says Sokunbi.

While the checks make it easy to access your credit, fees and interest rates can quickly add up. The interest rate is “usually significantly higher than your regular credit card interest rate,” Sokunbi notes. The typical cash advance APR can range from 25%-30%, which is significantly higher than the average interest rate on credit cards at 14.51%

You’ll usually pay a transaction fee, which is normally about 3% to 4%. Additionally, convenience checks don’t typically come with a grace period between when you use the check and when you pay it off. So while you might have a few weeks to pay off your credit card balance before accruing interest, a convenience check could start charging interest immediately. 

Pro Tip

If you’re writing a convenience check, make sure you can handle any fees and high interest rates you might incur.

Furthermore, your cash advance limit may be lower than your overall limit for the card. If you’re not mindful of that restriction, you could exceed it and incur a penalty from your credit card issuer. 

Your credit score also comes into play here. “Even though convenience checks do not directly impact a person’s credit score, using a credit card convenience check could increase your credit utilization ratio,” says McKague. A high credit utilization ratio, where you use a large portion of the credit available to you, can negatively affect your credit score. 

Benefits of Convenience Checks

You can use a convenience check to purchase something at a retailer that doesn’t accept credit cards, for example if you’re short on paying your rent. You can also use it to withdraw cash at a bank, with the money coming out of your credit line instead of your bank account.

Sometimes you’ll get a special offer with a 0% interest rate for six months or even a year, says McKague. Keep in mind that when this period ends, you need to pay off your debt immediately or you’ll accrue interest.

Using one of these checks to pay off a high-interest credit card could save you money in the long run, but only if all the factors line up, says McKague. “If you’re doing the math, it might make sense to transfer the balance for that 0% interest rate as long as you know you’re able to pay off the balance inside that timeline,” she says.

Are Convenience Checks Safe to Use?

If you’re aware of the APR and terms, convenience checks can be safe to write, McKague and Sokunbi say. However, there are some issues to be aware of: 

  • Possibility of Identity Theft: Many convenience checks don’t require signatures. If they end up in the hands of a scammer, they can be used to fraudulently draw money from your credit line. Be sure to write VOID across your unused convenience checks and tear them up.
  • No Dispute Process: If you make a purchase with a credit card and the retailer turns out to be fraudulent or doesn’t provide the product or service you paid for, you can often dispute the purchase with your credit card issuer. But if you use a convenience check, you’ll need to pursue a refund from the merchant directly. 
  • Over-Limit Penalties: If you use a convenience check to draw money beyond your credit limit, you’ll likely incur an over-limit penalty from your credit card issuer. 
  • Accepting a Convenience Check: Accepting a convenience check might not be safe, because the issuer might be over their credit limit. “So if you’re a person accepting a convenience check, be very wary,” says McKague.

With the pitfalls and costs of convenience checks, you’d be wise to only use them when you really don’t have a choice. If you need fast cash, you can also consider getting a low-interest personal loan. If a convenience check is your only option, be sure to pay it back as quickly as possible to avoid costly interest charges.