How Should You Deal With Convenience Checks?
As Christmas is looming, many credit card companies are rushing out tons of convenience checks. Just in the last 48 hours, I received six envelopes of convenience checks from different companies, all begging me to enjoy the "convenience" their checks provide. If you receive the same flurry of convenience offers, how should you respond?
My quickest answer: tear up the checks and dispose them properly.
Why don't I follow the trend and enjoy these convenience? All these convenience comes at a price. Usually, the fine prints on the checks say a cash advance fee or balance transfer fee of 3% will apply with a minimum of $5 or even more. Plus, some of the checks carry a high APR that, unlike credit card purchases, will hit you the moment your check is cleared. Even with those 0% APR checks, if you carry some higher interest rate balance in your credit card, when you pay back your card, all your payments will be used toward your 0% APR balance first, effectively reducing the sweetness of these 0% APR offers.
As a matter of fact, if you have some cheaper sources of cash, like your saving account or home equity line of credit, you should use them first before considering any of these convenience checks. If you don't have other cash sources, you'd better avoid spending.
Now back to my response "tear up the checks and dispose them properly." Why should you tear up the checks? That is because if someone else picks up the check from your garbage, he can go to an ATM and cash it to his own checking account. You probably will not notice this until the next statement comes.
After you tear these "convenience" checks up, you should also consider to dispose the remnants properly. Why? If you look into the numbers on the checks, sometimes your credit card numbers are included in the check. You surely don't want people to piece together the remains and know your credit card number, right?
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I'd recommend calling the credit card company and requesting that they not send you the checks in the first place, thus eliminating need to dispose of the checks in the first place and the possibility that they'd be intercepted in the mail. Plus less junk mail for you to have to weed through.
