Cash Advance Credit Card

How would you like to receive a blank check in the mail to be used at your disposal for whatever you'd like? Well, if you're a credit cardholder, chances are you've already received such a check at one time or another from your credit card company. That alluring slip of paper (or batch of slips of paper) you've probably gotten in the mail is called a convenience check, and although it may be tempting to use it to pay off one of your bills, it's important to understand that they are often not nearly as convenient as their name may suggest. In fact, the term is outright misleading, as the use of convenience checks usually carries significant costs and hidden fees that make them far riskier than they are rewarding.

So What Is a Convenience Check, and Why Should I Avoid Using It?

A convenience check is an allegedly free, normally unsolicited check mailed to cardholders, often attached with a letter from the card issuer stating that the check may be used to "pay down other debts" or "consolidate your outstanding credit card balances." The check acts as a kind of cash advance on your credit card, allowing you to borrow money directly from your line of credit. Nowadays, cardholders receive these checks within mere weeks of opening an account, and they are also common to see in mailboxes near holiday shopping seasons. Though they may appear to be normal, reliable checks that can help out when money is tight, the truth is that using these checks will probably further complicate one's financial difficulties rather than help alleviate them.
Probably the most decidedly inconvenient feature of a convenience check is the lack of a grace period for cash advances on a credit card, meaning the check begins to accrue interest on the balance immediately from the time it is drawn. It also doesn't help that they qualify for the highest interest rate applied to cash advances, making them much more expensive to use than someone may initially think. Interest rates can hover around 20% or even more. On top of this, many issuers charge exorbitant fees just to issue the check; these fees can often range from 2% to 5% of the total check amount. It is also not uncommon for agreements to stipulate that cardholders must be responsible for the total amount of the check, unlike the $50 liability limit on a stolen or unlawful use of a credit card. Whereas with a credit card, damaged or stolen items can often be replaced, convenience checks offer little to none of the same purchase protection.
Little by little, these costs add up to an unsolicited mess that seems designed to mislead and frustrate consumers. Very little that entails the use of convenience checks is notably convenient, as the issuer will often review a cardholder's credit history as soon as he or she attempts to use a check. If the company decides that the cardholder is using too much credit for purchases, it can decline authorization to use the convenience check, putting the consumer in a difficult financial situation. Consumers' credit card statements are also often attached with convenience checks in the mail, making them easy targets for thieves. If the issuer accepts the consumer's use of the check and the check doesn't get stolen from your unlocked mailbox, then you'll only have the aforementioned interest and fees to worry about. Needless to say, you should try to avoid using convenience checks altogether. If you're in need of quick cash, it is significantly less risky to consider taking out a payday loan.

Zero Percent Credit Card

Banks that offer credit cards usually make some kind of offer to encourage customers to apply for the credit card. These cards may come with lower interest rates and some even offer zero percent interest for a period of time. While it may be easy to find companies that offer these deals, it is important to realize that the introductory interest rate will not last forever. There will come a time when the interest will increase and you will be paying a much bigger bill on any balance that remains on the card.
It is important that you take a minute to explore the card offers before you immediately sign up for the new card. You should understand how long the introductory rate will last and what it will increase to when it does return to the normal interest rate. Your financial situation depends on how you handle these credit issues. One of the main reasons why people burn their fingers with credit of any kind is because of the lack of understanding of interest charges.
When you begin your research in these low interest cards, you should understand why the company is making such a generous offer. The bank is using the low interest rate to encourage new customers to taking out a new card. Zero percent interest rates are called a teaser rate to get new customers. The company uses the low rate to bring in new customers and when the introductory rate ends, the standard interest will apply. Customers that have a balance at the end of the introductory rate will end up paying the higher rate on the money still owed on the card.
For those who make the mistake of maxing out the card, it will end up costing a lot of money when the interest rate changes. The best thing to do with these cards is to keep the balance low when the introductory rates are going to increase. When the time comes for the credit card interest rate to go up, a low balance will keep your payments low. The zero percent interest rate can save you a lot of money for the introductory period. Remember to keep the balances under control when you sign up for a zero percent interest card. You will have to pay a higher rate at some point.
In the end it boils down to understanding exactly what your responsibilities really are. Credit does not come cheap and special deals and offers are usually just ways to hook you. If you are smart you can use it to your advantage. If you are not it will cost you.