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What Are Credit Card Convenience Checks – Rates, Fees, Pros & Cons

Credit card companies like to bombard consumers with special offers, and if you have a good credit score, you likely receive pre-approved credit card invitations from time to time. Furthermore, if you already have a credit card in your name, your issuer may periodically send you convenience checks tied to your credit card account. You can use these checks for any purpose, providing that a retailer or other business accepts this method of payment.

Convenience checks look like regular checks, and if you’re cash-strapped, they’re pretty enticing to use. However, before you hastily fill one out, it is crucial that you learn how convenience checks work – and understand the numerous risks.

How Convenience Checks Work

Convenience checks work in the same manner as a regular check. But unlike a regular check that takes money from your checking account, convenience checks add money to your credit card balance. If your credit card allows cash advances, your credit card company may periodically send you five or six convenience checks in the mail at a time. These checks have expiration dates, and you can use them within the allotted time frame to write a check for any amount up to your available credit.


However, convenience checks are not free. If you don’t understand the fees, you may pay much more than necessary for some purchases. Obviously, you have to pay back the money you spend – but if you believe that you’ll pay a rate comparable to credit card purchases, you’re sadly mistaken.

When you write a convenience check, you basically take a cash advance against your credit card. Therefore, the purchase is subject to a cash advance interest rate, which is typically higher than the rate on credit card purchases. For example, if you apply for the Capital One Cash Rewards credit card, your interest rate on purchases can be as low as 12.9%. But if you take a cash advance, you’ll pay 24.9% interest. There is no grace period, and interest accrues immediately on cash advances. Plus, there is also a cash advance fee – about 4% of the purchase amount.

Advantages of Convenience Checks

Despite the higher costs and fees, some situations call for convenience checks. But while convenience checks can be helpful, in most cases, they should only be used as a last resort:

  1. Can Be Used for a Balance Transfer. Convenience checks make financial sense if you consolidate debt and transfer your balance from one credit card to another. By means of a balance transfer, you can usually acquire a cheaper interest rate. Fortunately, convenience checks used for a balance transfer are not subject to the cash advance interest rate. However, there is a balance transfer fee (often 3%), and many credit card companies offer an introductory rate of 0% interest for a certain number of months. Afterwards, you must pay an interest rate comparable to the rate for credit card purchases.
  2. Can Be Used If Credit Cards Aren’t Accepted. If you are doing business with a contractor or an individual who does not accept credit cards, you can use convenience checks to settle your balance if you do not have cash. Of course, this is an expensive way to settle any balance. If you don’t have cash, but will soon, try to negotiate a payment extension. But if you must use a convenience check, avoid high finance fees by paying off the entire credit card balance as soon as you can. When your credit card includes balances with different interest rates, creditors apply your minimum payment to the balance with the lowest interest rate first. Since cash advances typically feature higher rates, minimum payments aren’t applied to this balance until your regular charges are paid in full. However, if you pay more than your minimum, creditors apply the extra money to the balance with the higher interest rate. In other words, if you only pay your minimum, it will take much longer to pay off a cash advance – and all the while you’ll rack up high interest charges from the high cash advance interest rate.

Convenience Checks Advantages

Disadvantages of Convenience Checks

Before filling out a convenience check, understand that there are multiple downsides:

  1. High Interest Rate. If you write a convenience check for anything other than a balance transfer, you’ll pay an interest rate that’s much higher than the interest rate on regular purchases – and with no grace period. You incur interest the same day as your purchase.
  2. High Fees. Whether you use a convenience check for a cash advance or a balance transfer, you will be charged fees. Fees are typically a percentage of the check amount, such as 4%, with many creditors charging a minimum fee or a percentage – whichever is greater. Keep these fees in mind when writing convenience checks, and borrow as little as possible to lower your costs.
  3. Decreases Your Available Credit and Credit Score. Because convenience checks are tied to your credit card account, writing a check for purchases decreases your available credit. And if you write a check that exceeds your available credit, you’ll pay an over-limit fee and a return check fee. Ideally, your credit card balances should not exceed 30% of your credit limit. If your cash advances eat up most of your available credit, this can lower your credit score as well.
  4. Offers Less Protection on Purchases. If you purchase a defective product with your credit card, the issuer may provide you with a refund. The Fair Billing Credit Act offers consumers a measure of protection for purchases. Unfortunately, this protection does not extend to purchases made with convenience checks. If you receive a defective product and you made the purchase with a convenience check, you’ll have to contact the retailer to negotiate a refund.
  5. Increases Risk of Identity Theft. Losing your convenience checks or leaving them in plain view of others increases the risk of identity theft. To prevent this, call your credit card company and request to opt out of convenience checks. Do not leave mail in your mailbox for long periods, and if you receive convenience checks in the mail, shred the ones that you do not use.

Final Word

If used responsibly and carefully, convenience checks aren’t entirely bad. However, before writing a check, contact your credit card company to verify your cash advance interest rate and fee. Next, develop a strategy to pay back the balance quickly. But remember, use convenience checks as a last resort and only after you’ve explored other options, such as a zero-interest loan from family or friends, or a cash advance from your employer.

Do you think convenience checks are worth the trouble?

Valencia Higuera is a personal finance junkie who enjoys reading articles on budgeting, saving money, and credit cards. She has written personal finance articles and blogs for several online publications. She holds a B.A in English from Old Dominion University and currently lives in Chesapeake, Virginia.