When you get blank checks in the mail from your credit card company, most of us are smart enough to know that it’s a marketing scheme.
If you really think you’re going to fill out those checks without paying for it later, I’ve got some ocean-front property in Iowa I’d like to sell you.
You’re probably fully aware of the fact that those so-called credit card convenience checks will end up being very inconvenient in the end. So you just toss them in the trash and forget about it. But that could be where your troubles begin.
What I’m about to tell you could very well blow your mind! (Maybe not but it helps that picture make sense)
First a few facts about what could happen if you DO use those checks…
The promotional offer might inform you that you can use the convenience checks to pay off other debt – in essence – the checks let you complete a balance transfer to that particular credit card. The junk mail may even claim you’ll get an excellent rate. But just like always, experts say it’s important to read the fine print.
“They don’t realize the fees that will be charged and they don’t realize that wonderful rate doesn’t last long at all. Everything is put in tiny print. It’s hard to know what’s going on,” Georgia State University law professor Mark Budnitz told MarketWatch.com.
Those checks are really nothing more than a cash advance from the credit card issuer. Cash advances are one of the worst things you can do with your credit card. In addition to the fees you’ll pay just for using the checks, you’ll also be paying an APR that’s more than likely above 20%.
APRs are typically higher on cash advances. You’ll start paying interest immediately after you complete a transaction using those convenience checks. Plus, the money borrowed as a cash advance won’t get paid down until your normal monthly balance is completely paid off.
However – simply ignoring those promotional offers could also be a mistake.
If those credit card convenience checks are lost or stolen, you could end up with a major headache.
Crooks can use those checks to pay off their own credit cards. It’s hard to prove that someone else used a convenience check sent to you to pay off their own bills using your line of credit. Privacy laws will prevent you from accessing the potential thief’s account information – which would be the easiest way to prove fraud.
Consumer protections aren’t the same for convenience checks either. Carole Reynolds, a senior attorney with the Federal Trade Commission, told MarketWatch that you cannot expect the federal law limiting your stolen credit card losses to $50 to apply to those blank checks.
So what should you do?
Shred those credit card convenience checks into tiny bits before you throw them away!
No matter how hard up you are, and how convenient those checks might seem. They are nothing more than another debt trap.
If you want to get rid of that sort of junk mail all together read our post on where to go to opt out of credit card offers. You’ll be helping the environment and protecting your identity at the same time!
For those of you who think using those convenience checks is a good idea…make sure you read the fine print -which you should be able to find on the bottom of those checks or on the back of the sales letter. Make sure you know exactly what you’re getting yourself into! Learn more by watching the video below.
Image Credit: purplemattfish
Kasey Steinbrinck provides helpful personal finance tips on behalf of online check printer Check Advantage. Visit the site to order checks online including Animal Checks and Retro Checks. Get free content for your blog or website when you contact Kasey for more information.
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