Convenience Check Overview
Convenience checks work in the same basic manner as any other check. They can be written to anybody who accepts checks, although the main difference is the money comes from your credit card, not from your checking account. You can write a convenience check for any amount up to your available credit. If you exceed your credit limit with a convenience check the credit card company may not honor the check and you will likely be charged an over-the-limit fee, as well as see your annual percentage rate increase to the default rate for over-the-limit users.
Reduced Interest
One of the appealing things about convenience checks is that many of them offer discounted interest rates. The discounted rates may last for a specified time or until the balance is paid off. If the discounted rate lasts for a specified period of time, the new interest rate may be higher than the interest rate for standard purchases, so be sure to read the fine print before using a convenience check.
Usage Fee
The majority of convenience checks also have a usage charge, which is basically an additional fee for using the check. These usage charges can range between 2 and 5 percent of the convenience check amount.
Fraud Possibilities
Another potential drawback is that convenience checks are easily accessible to criminals, as they can be found in your mailbox or trash. While credit card users are protected against fraud, the credit card institution may hold you responsible for convenience check usage, even if fraud has occurred. It is best to shred the checks if you don't use them or ask the card issuer not to send you checks if you do not plan on ever using them.
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