Convenience Check - Be Careful When You Get A Convenience Check

You may have received convenience checks from your credit card issuer. You may want to buy something with the amount stated on the check. You may want to buy a new plasma TV or even a new H-Fi system. However, you should be very careful when you are trying to make the purchase with it.

In fact, the amount stated on the convenience check is only a cash advance on your credit card. There may be some fees behind the amount of the cash you get from the check. There may even be interest without a grace period, which you will have for a normal purchase with your credit card.

As a result, you should be very careful and think thoroughly before you use the cash advance. Normally, there can be a charge up to 4% of the cash advance. Besides, the interest can be also higher than that for normal purchase. This can be a serious problem if you are paying the minimum fee every month. It will be just like using all the money you have paid to pay the interest.

As mentioned, the cash you get from the convenience check will probably have no grace period. This means that the interest will apply once you use the cash to purchase.

Although there are fees associated with the cash advance, the good news is that by law the credit card issuers have to disclose all the fees associated. As a result you will be able to know how much you need to pay if you use the cash advance.

You may be curious why the credit card company charges you extra for cash advance. The reason is of course the cost. The cost of offering you the cash advance is usually higher than that of a credit card purchase. As a result the card company will transfer the cost to the customers.

Remember, you should never use the cash without understanding all the fees associated otherwise it will only put you in trouble. Of course you may be tempted to withdraw the cash. Everyone would have the temptation to spend when they know that they can have some instant cash. However, you have to always bear in mind that using the cash advance may put you in debt.

You should also read the credit card statement carefully when you receive it every month. By doing that you will be able to know all the fees that the card company charges you.