If you get one of those credit-card “convenience check” offers in the mail, shred the whole package. They usually come with high fees and low consumer protections.
In a typical solicitation, you’re told you can transfer your outstanding credit card balances to a low-rate card. However, the promised low rate won’t last long. In addition, these checks often have a $10 minimum transaction fee–even if you write a check for only $25 or $50.
If you use a convenience check for a cash advance, as is frequently suggested, expect to be hit with a lofty interest rate, much higher than the rate on purchases. Nationally, the average cash-advance rate for these checks is nearly 20 percent.
Worst of all, you could face financial problems if a convenience check is lost or stolen. The federal law that limits losses to $50 for improper use of a credit card does not necessarily apply to convenience checks. Similarly, you might not be entitled to relief on defective merchandise, under the Truth in Lending Act.
Thus, when you see something like this in your mailbox, it’s better shred than read.
