The High Cost of Convenience Checks, Plus 4 Better Options

You open the mail to find three blank checks.

A gift from your credit card company? Hardly.

Convenience checks, as they’re known, can be used to pay off balances on other cards, make purchases that you couldn’t use your credit card for or to write the check out to cash (even to yourself).

But those checks are by no means free money — even if it may seem like the solution to your problems if your finances have taken a sudden turn for the worse.

“Basically, you’re just writing a check to someone, but the money is coming off your credit card,” said Alexandra Wilson, Certified Financial Planner. 

That means whatever amount you write the checks for gets added to your credit card balance — along with the attendant interest. Here’s what you need to know about convenience checks — and some better alternatives.

What Are Convenience Checks?

Convenience checks are really just promotional tools used by the credit card companies to offer you another option for spending. While they can be a convenient way to pay someone who can’t take a credit card or to access cash quickly, that convenience comes at a high cost.

Pro Tip

If you’re afraid you’ll be tempted by blank checks arriving in the mail, you can opt out of preapproved/prescreened offers by registering at  

Before you cash one of those checks, you should know what you’re getting when you sign on that line.

Interest Rates

Because convenience checks are essentially cash withdrawals, you’ll pay a higher interest rate than you would if you were making a purchase with your credit card at a cash register or online. 

And similar to cash advances, you’ll start accruing interest immediately when you write a convenience check — unlike the grace period you typically get with a credit card purchase.

Pro Tip

One rare situation when using a convenience check might be the better alternative? If the interest rate for the convenience check is less than your other option, such as with as a payday loan.

Even if you receive an offer in the mail for a limited time 0% APR on the checks, read the fine print. 

That APR may only apply to a balance transfer, and although you might get the 0% interest rate, you could be charged a convenience fee. And if you miss the promotional deadline, expect to be charged the interest on the entire amount from the moment you wrote the check.

Credit Line Limits

Before you use one of the checks, know that you don’t get unlimited spending power — and you typically have even less to spend than you would if you used your credit card to make the purchase.

”Your credit limit might be $2,000, but your cash advance limit might be $500,” Wilson said. “So if you write a check for $1,500, it’s going to bounce.”

Alternatives to Convenience Checks

Depending on the reason you need the money, consider these alternatives to convenience checks:

1. Use Your Credit Card. 

If the business won’t accept credit cards, consider whether you can purchase the item or service elsewhere. Additionally, most credit cards also offer purchase protection if there’s a problem, which you likely won’t get with a convenience check.

2. Consider an Electronic Balance Transfer. 

If you’re trying to transfer a balance from another credit card, look into an electronic balance transfer instead of using a convenience check. You may be able to find a better promotional APR period and by doing the transfer electronically, your issuer may charge fewer fees than if you used the paper convenience checks.

If you can’t find a balance transfer offer on your credit card issuer’s website, contact the credit card company directly, Wilson advised.

“Call the credit card issuer to see if they can offer you a balance transfer instead of just writing out the check,” she said. “Even with balance transfers, you can actually send money to your checking account.” 

4. Use a Mobile Payment Service

You’ll still get charged a convenience fee if you use your credit card, but mobile payment services like Venmo or PayPal charge around 3% for sending money to people using a credit card. If you can pay off the credit card payment by the next due date, you’ll save a bundle on interest compared to a convenience check.

5. Purchase Gift Cards. 

This option won’t work in many cases, but if you owe an individual, ask if they’ll accept gift cards as payment. You can purchase one for the amount you owe the person from one of the major card card issuers — like American Express, Visa, MasterCard — that they can use at most merchants. 

Pro Tip

If you decide not to use convenience checks you receive in the mail, write “void” across each check and shred them so would-be thieves can’t get their hands on them.

There may be an activation fee associated with activating the card, but it’s typically a much better rate than you’ll get with a convenience check.

And every dollar you can save now can be used to build up your savings for the next cash emergency.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

This article originally appeared on The Penny Hoarder