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Credit Card Convenience Checks: What You Need to Know Before You Use One

Credit Card Convenience Checks: What You Need to Know Before You Use One

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This article was last updated Dec 07, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Cardholders are sometimes surprised to find blank checks appear in the envelope with their monthly credit card statements. Card issuers often refer to these as convenience checks — but the truth is they’re not all that convenient.

“The trouble with these convenience checks is that the banks often treat them like a cash advance, which makes them really expensive,” said Matt Schulz, chief industry analyst at CompareCards.

Cash advances often come with a fee between 1% and 5%, on top of higher interest rates than other credit card transactions. In addition, there typically isn’t a grace period in which you can avoid accruing interest on the amount of the check.

“That makes these checks a strong revenue generator for banks,” Schulz added — and a very expensive way for consumers to get cash.

However, you need to be sure you understand all the fees and rates involved with the transaction before you use a convenience check. Before you even make a move, educate yourself on the interest rates and all the fees associated with what could essentially be a cash advance disguised as a harmless-looking check.

How convenience checks work

Convenience checks can seem appealing, especially if you need some quick cash. All you have to do is make the check out to yourself and deposit it into your bank account. You can also write the check to buy something or make it out to someone else to pay a bill or a debt. What you don’t want to do is use a convenience check to pay off the balance on another credit card.

To be clear, convenience check transactions are considered as cash advances on your credit card. With steep interest rates, costly fees and no grace period before interest starts accruing, writing that check is about the most expensive way to use your plastic.

Cash advance interest rates are typically higher than the normal purchase APR (around 25%) on your credit card.

Convenience checks also come with a transaction fee on top of the interest rate. For example, the Capital One® Quicksilver® Cash Rewards Credit Card comes with a cash advance go-to rate of 25.74% (Variable) APR, along with a cash advance fee of 3% of the amount of the cash advance, but not less than $10.

Card issuers may also send you promotional balance transfer checks, which can be helpful if the issuer is offering a 0% interest-free deal and you’re struggling with high-interest debt on another card — but don’t mistake them for convenience checks!

Check out this roundup of Best Balance Transfer Credit Cards.

Alternatives to convenience checks

Because of the high cost of these checks, you may want to consider all other options before you use one. Below we list some lower-cost ways you can avoid writing a convenience check.

Explore 0% promotional credit card deals

If it’s a high-interest debt on another card that you’re worried about or you need to make an expensive purchase, explore 0% promotional credit card deals. For example, the Citi Simplicity® Card - No Late Fees Ever card has one of the longest intro purchase APRs on the market, at an intro 0%* for 12 months on Purchases*, along with a 16.49% - 26.49%* (Variable) APR regular purchase rate after the introductory period. The card also comes with an intro 0%* for 21 months on Balance Transfers* and a regular rate of 16.49% - 26.49%* (Variable) APR after the intro period.

That means if you need to make a big purchase or want to pay off another credit card balance, you’ll have well over a year to make payments without paying a dime in interest. Another way this card beats using convenience checks is with its lack of fees. With the Citi Simplicity® Card - No Late Fees Ever, there’s a $0* annual fee, no late fees and no penalty rate if you happen to miss a payment.

  • 0%* for 12 months on Purchases*

  • 0%* for 21 months on Balance Transfers*

  • 16.49% - 26.49%* (Variable)

Highlights
  • No Late Fees, No Penalty Rate, and No Annual Fee... Ever
  • 0% Intro APR on balance transfers for 21 months from date of first transfer. All transfers must be completed in first 4 months. After that, the variable APR will be 16.49% - 26.49%, based on your creditworthiness
  • 0% Intro APR on purchases for 12 months from date of account opening. After that, the variable APR will be 16.49% - 26.49%, based on your creditworthiness
  • If you transfer a balance with this offer, after your 0% Intro purchase APR expires, both new purchases and unpaid purchase balances will automatically accrue interest until all balances, including your transferred balances, are paid in full
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
  • The same great rate for all balances, after the introductory period
  • Save time when you call with fast, personal help, 24 hours a day – just say "representative"
  • Enjoy the convenience of setting up your own bill payment schedule on any available due date throughout the month

See additional details for Citi Simplicity® Card - No Late Fees Ever

More Info

Take out a personal loan

A personal loan may be another option, depending on your credit situation, according to Compare Card’s Schulz. “A loan can give you more time to pay off your debt since it tends to come with longer terms than a balance transfer credit card,” he said.

MagnifyMoney.com has a tool that lets you compare personal loan offers to see what’s available to you.

Consider a home equity loan or line of credit

If you have equity in your home, you may want to consider taking out a loan or line of credit against it. The interest rate on these tend to be lower than personal loans or convenience checks; however, there are oftentimes closing costs and fees that come with taking out these types of loans, so make sure you do the math before you apply. Plus, you’d be trading unsecured debt for secured debt, so if you can’t make the payments, you may risk losing your home.

Use LendingTree’s home equity calculator to estimate how much you can borrow.

The bottom line

Convenience checks aren’t just free money, according to Schulz, noting that “in fact, they can be more expensive than your typical credit card transaction.”

“If you find yourself in a bind,” he added, “they’re obviously a better choice than payday loans or other bad options, but in normal circumstances, they should probably be avoided.”

A better way to use a credit card to tide you over would be to utilize a credit card that comes with 0% intro APR on purchases or balance transfers. Always look for credit cards with the lowest fees and interest rates in order to save the most money.

Disclosure: MagnifyMoney is owned by LendingTree, which also owns CompareCards.


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