What Are Convenience Checks?

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Convenience checks sound like normal checks, but this can be a major misunderstanding that deeply affects your credit.

In fact, if you use the credit card convenience checks you get in the mail as a regular paper check, you will be in for a nasty surprise.

Let’s take a closer look at what are convenience checks and what you should know before you use one. 

What Are Convenience Checks?

Not Your Average Check

what are convenience checks

You’re not going to find convenience checks offered to you as a way to spend money from your checking account.

Instead, convenience checks are blank checks that are offered by your credit card issuer as a means to encourage you to spend money.

They work like a personal check in that you can make the check out the merchant for the amount of your purchase and then sign it.

The merchant then presents the check to their bank, who cashes it for them.

Since they are not tied to your checking account, the money does not come out of this account.

The money is drawn from your credit card account, causing you to have a credit card balance.

It’s important to know they do have a higher interest rate than your purchase APR and there is a cash advance limit, which is typically lower than your credit card’s credit line.

In the end, a convenience check functions the same as a cash advance that you might be able to request with your credit card.

Knowing this before you go spending any money that you don’t have is very important. 

How Do I Get A Convenience Check?

Sometimes, a credit card company might send you convenience checks as an easy way to encourage you to open up a line of credit with them.

After all, there’s a reason they’re referred to as being convenient.

However, credit card checks are often ordered by the person with the open line of credit or sent as part of a monthly statement.

If you don’t get paper statements in the mail, your credit card company might just send you them every so often.

Another way to get one is to log onto your account and request one.

You could also call your credit card company and request one over the phone as well.

Where Can I Cash A Convenience Check?

writing a check

The good news about convenience checks is that you can cash them anywhere you can cash a regular check.

However, some banks may only provide you with the partial cash value of your check and deposit and hold the rest of it in your bank account.

This is because they want to limit fraud and make sure the funds are available to cover the amount of the check.

The last thing the bank wants is to cash a check for $10,000 only to find out they are only able to get $5,000 for the check.

As you would with any other financial service, make sure that you carefully read the fine print before using the convenience checks offered by your credit card company.

Make sure you understand the cash advance fee that is charged, the cash advance interest rate, and any extra fees.

It is also important to know if there is any grace period offered, but know that most credit card companies do not offer a grace period on credit card cash advances.

This means interest charges begin to accrue from the day you take the cash advance, not 25 days after like typical credit card purchases.

Knowing this information and how to use them can help you avoid any issues along the way. 

For example, credit card companies will also send you balance transfer checks too.

A balance transfer check is very similar to convenience checks in that you can pay anyone who accepts a check.

But instead of acting like a cash advance, they act like regular purchases on your credit card.

Benefits Of Using Convenience Checks 

As stated above, convenience checks act as a cash advance.

For example, if you find yourself short on cash for certain things like rent or utilities, you can use a convenience check to pay for these things, which you wouldn’t be able to do with a credit card.

Another situation in which a convenience check would be helpful is when you find yourself unable to pay for something due to a debit card or checking account error.

Convenience checks would then give you access to quick cash in emergencies that you can immediately pay back later.

Finally, convenience checks are often advertised as great ways to pay other balances on credit cards that you owe. 

Put simply, the major benefits of a convenience check are that you’re able to get cash you don’t have in your checking account and pay for things that you might not be able to pay for using your credit card. 

Downsides Of Using Convenience Checks 

drawbacks of convenience checks

As you probably know if you have a credit card, people are wary of cash advances and spending money that they don’t have.

This is for good reason.

There are plenty of downsides that come with using convenience checks if you’re not careful or knowledgeable enough about these financial tools.

Some of the most notable downsides include: 

#1. Falling into the trap of spending money that you don’t have and racking up even more debt.

As with any other aspect of your credit card company, they charge interest on your amount you take, and missed payments can end up costing you more than what you cashed your check for.

If you can’t pay back the amount immediately, it’s best not to borrow it to begin with. 

And because of the high cost from fees and a higher interest rate, you shouldn’t use these checks for new purchases.

They should be reserved for critical situations that you need money for because you absolutely cannot go without.

#2. There are no grace periods for convenience checks.

When you fail to pay the full amount that you borrowed, you will face penalties and consequences that will make it harder for you to recover as you struggle to pay off both the check and your credit card in full.

Keep this in mind if you do ever use a convenience check. 

#3. You can go over your credit limit when you write a convenience check.

This is the problem that many modern consumers face when they use too many tools offered by their credit card companies.

If you don’t know how to use a tool safely so that you don’t end up exceeding your credit limit and dealing with penalties, avoid using convenience checks altogether. 

Put simply, there are always hidden fees and items that you may not know about until it’s too late.

This is why convenience checks and similar offerings from credit card companies go unused as dealing with credit card debt and interest can be enough of a responsibility. 

Should I Use Convenience Checks?

Ultimately, your decision to use a convenience check offered to you or requested by you will depend on your financial situation.

However, before you sign your name and put the amount on your blank check, ask yourself these questions: 

  • Do I really need this cash, or can I find another way to pay for something or go without it until next payday? 
  • Do I fully understand all of the terms and conditions that come with using this convenience check and the consequences that will take place should I find myself unable to pay the full amount back? 
  • Do I have a payment plan to pay this convenience check back as soon as possible to avoid getting into more debt and impacting my finances further?

If you’re not confident about using convenience checks, either wait until you have a full understanding of how they work or find another way to pay for something that you need.

Better Alternatives To Convenience Checks

If you are in a bind, what are some other options you can use to survive financially?

Here are some different ways for you to access cash quickly and at a lower cost.

One alternative to convenience checks worth considering is taking out a personal loan.

While this isn’t ideal as you are still getting yourself into debt, personal loans at least charge a lower interest rate, and not any upfront fees.

Arguably the best option is a balance transfer.

While these are intended to move your balance from one credit card to another, there is no rule saying this is what has to be done.

Simply request this type of check from your credit card company and then make it out to cash and deposit the money in your checking account.

You will have the money to pay your bills and your credit card balance will increase.

Again, this does put you into more debt, but it’s cheaper debt than if you used a convenience check.

And many times, you can get a promotional offer of 0% interest rate on balance transfers.

Just know that is usually an intro APR and your interest rate will revert back to your standard APR when the promotion ends.

While a balance transfer credit card charges a small balance transfer fee for this, it is a less expensive way of getting cash than using a convenience check.

Below is a list of some of the best balance transfer credit cards out there right now.

Still there are other alternatives for you.

You could ask family or friends for money, or even finding simple ways to generate extra income during a short-term period through a side hustle.

Finally, you might consider going around your house and selling some unused items for cash.

Final Thoughts

Now that you know what are convenience checks, you need to decide if using one is right for you.

While they are good for helping you to cover short term emergencies when you don’t have the cash on hand, they should be used sparingly, if ever at all.

Ideally, you want to work on improving your financial situation so that you have a fully funded emergency fund or other money to cover short term emergencies and not have to resort to convenience checks.

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