Sneaky Credit Card Trick #4 - Convenience Checks

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Often we receive attractive "convenience" checks from our credit card companies. The convenience offered is the ability to write checks against our credit card account. Beware, even the most tempting offer comes with hidden fees that make the risk far greater than the reward.

What is sneaky about these checks?

These checks usually carry a very high interest rate (higher than what our regular card charges). Often there is a hefty fee for using convenience checks. This might be as much as 2 to 5 percent of the check amount!

Most cards offer no grace period on convenience checks. The result is we end up paying interest from the day we write the check! And the sneaky thing is all these details are buried in the fine print.

We are not yet done. The worst part is that if our card has an existing balance, any payments we make will be applied to the lower balance first, at our current interest rate, before they are applied to the convenience check balance. Consequently the balance from the convenience check will continue to pile up interest until the previous lower APR balance on our credit card is paid off. Here are a few case studies courtesy Consumer Affairs.

Way(s) out?

Shred these "little devils" whenever they arrive. There is no better solution than that!

Series

» Sneaky Credit Card Tricks - An Introduction
» Trick #1 - Over The Credit Limit Fees
» Trick #2 - No Grace Period
» Trick #3 - Late Fees In Minutes
» Trick #4 - Convenience Checks
» Trick #5 - Skip A Payment Invits
» Trick #6 - Lower Minimum Payments
» Trick #7 - High Cash Advance Fees & Rates
» Trick #8 - Fixed Rates are NOT Fixed
» Trick #9 - 0% APR - Take Care with the Fine Print
» Trick #10 - Beware of Disability Coverage & Card Theft Insurance

Image Source(s): iStockPhoto

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