Before Signing on the Dotted Line: Purchase, Balance Transfer, and Convenience Checks
We all get them and I know I personally get them a lot. I’m talking about Purchase, Balance Transfer, and Convenience Checks.
So, what is the difference between balance transfer checks and convenience checks asides from the fact that they eat into your credit card line?
Purchase Checks:
- Deducts from your purchase credit line on your credit card up to your entire limit
- Tied to exact same Annual Percentage Rate (APR) as for your regular purchases
- Checks can be deposited into your bank account or cashed as regular checks
- Usually no grace period - finance charges begin accruing immediately after use
Balance Transfer Checks:
- Deducts from your regular purchase credit line
- Typically tied to a lower promotion interest rate from 3 months to 18 months
- The best rates are given when you sign up for a new card
- Usually no grace period - finance charges begin accruing immediately after use
Convenience Checks:
- Beware! Convenience Checks are tied to your Cash interest rate which is almost alway above 22% APR
- These look exactly like the checks issued for Purchase and Balance Transfers and intermittently mailed to confuse cardholders
- Usually no grace period - finance charges begin accruing immediately after use
As opposed to how it’s named, convenience checks are no more convenient than balance transfer checks except maybe for the banks.
Do yourself a favor next time before you sign on the dotted line, read the credit card mailing very carefully to determine what type of check you are signing. The text always makes it sound like a great deal; however, as always, when treating communications from credit card issuers, be skeptical.
Tags: convenience checks, checks, Advice, Balance Transfer, Interest Rates, Credit Cards
Good summary thx. Been burned before on the so called “convenience” checks. Convenient for the banks maybe but not for my wallet. Scammers.