Do you recall a time where a credit card offer arrived in the mail and blank checks were attached? These are called convenience checks which can be attached with your current credit card or a new company.

These blank checks are linked directly to a current credit card's line of credit or when you are establishing an account with a new issuer. They function like a personal check but draw money from your available credit instead of your bank account.You can use them for various purposes, such as paying bills, transferring balances from other debts, or getting a cash advance by writing the check to yourself.However, convenience checks are generally an expensive way to borrow. They are typically treated as a cash advance by the issuer, which usually means two major drawbacks:

They can come with a higher interest rate: The interest rate (APR) applied is often significantly higher than your standard purchase rate.
They can have immediate interest accrual: Unlike standard credit card purchases, interest usually begins accruing immediately from the moment the check clears.

So the question is: should these cards be used? The only scenario that this is useful is if you will pay a lower interest than what you are in the debt that is being transferred. On top of that, a transaction fee usually 3% to 5% of the check amount) is typically charged.

For example, if you use a check for $1,000, you’d pay $1,030 to $1,050. The plan is to reduce the current interest you are paying with other cards so the goal is to find cards with promotions of 0% or a low introductory APR for a set period. In this case, they are functioning as a Balance Transfer Check. Lastly, be sure that the new inerest rate after the introductory period expires, is the same or lower than what you pay now.

The bottom line is that having credit cards that accumulate interest is not condoned; however, if you make use of these cards, create a plan to aggressively pay off your debt as this is toxic to your financial future. The silver lining is that these companies are throwing you a bone due to a low interest rate for a period of time so take advantage and stop kicking the can down the road.
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