If you have a credit card, you’ve most likely gotten them more than once. That handful of blank “convenience checks” included in your monthly statement or sent out as a very special offer just for you. The offer sounds great—just fill out a few of these checks and take that vacation you’ve been wanting, pay off some other bills, and get yourself a little something when you’re all done! It may be too tempting to pass up—after all, they’re basically offering you free money, right? But as always, anything that sounds too good to be true usually is. Here’s why you should get rid of those checks as soon as possible and tell the company to never, ever, send you any more.

You Could Be Paying For Years

Read the fine print. Most likely, those interest rate on those checks is your cash advance rate, which could be over 20%, rather than your (hopefully) lower purchase rate. Combine this with the fact that your payments will be applied to your lower interest charges first, it’ll be a long time before you even start paying for that trip or plasma TV, with interest accruing all the while (there is no grace period for convenience check purchases). You’ll also pay a transaction fee, which could be as high as 5%, for each check you write.

You Don’t Get the Same Benefits

Convenience checks don’t offer either the protection or the perks of using your credit card. Most importantly, they’re not covered by the Fair Credit Billing Act, meaning you’re on your own if the item you buy is damaged or stolen. If you used your credit card, you wouldn’t be responsible for the charges in the event of a successful dispute. But pay with a convenience check and you don’t have that protection, leaving you at the mercy of the merchant. Also, purchases made with checks don’t contribute towards rewards programs—you won’t get any bonus points or cash back like you would if you used the card.

Checks Aren’t All That Convenient

Honestly, where do you shop that doesn’t accept credit cards these days? And when is writing a check ever easier than swiping your card? But simplicity aside, you can run into serious trouble with these checks. First of all, while you know instantly whether your purchase with a credit card is accepted or declined, your credit card company can decide to refuse to pay your convenience check for any reason, including items contained on your credit report. This may result in bounced check fees from the merchant’s bank, or leave you with merchandise you can’t pay for and can’t return.

Thieves Love Them

While most people are diligent about protecting their personal information, account numbers, passwords, and so on, many of the same people are careless when it comes to convenience checks. Throw the offer with the checks in the garbage, and an enterprising crook suddenly has access to your entire credit line. If you can’t get your credit card company to stop sending the checks, at least be sure to shred them before throwing them away.

The Bottom Line

Convenience checks offer all of the potential downside of credit cards, with no real benefits. If you’re comfortable using your credit line to make the purchase, put it on the card and get the rewards and protection to which you’re entitled. And if you have higher rate debt that you’re looking to consolidate, find a low-rate balance transfer offer and take advantage. You’ll still pay a transaction fee, but you won’t pay exorbitant cash advance rates, and will probably save a few bucks in the long run.

Photo by bradjward

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