Dangerous Convenience Checks
This weekend I recieved a check in the mail from Chase encouraging me to transfer my balance. After reading it I decided to do some research on the internet about these types of offers. It just happens that I found a great article explainning the danger of these checks and how easy it is for thieves to get your information, and possibly even cash from your account.
All it takes is a signature to use convenience checks sent by your credit card company. That makes it simple for a stranger to steal them and stick you with the bill.
Few financial products are actually evil, but convenience checks come pretty close.
Convenience checks are those slightly oversize checks, often issued in groups of three or four, that your credit-card issuer sends to encourage you to transfer a balance, make a purchase or tap your account for extra cash. Your card issuer might include them in your statement or send them separately.
But you pay, big time, for this “convenience.” These checks:
- Typically come with hefty upfront fees for using them, often 3% to 4% of the check amount.
- Can trigger high interest rates, often 19% or more, which kick in immediately with no grace period.
- Have fewer consumer protections than credit cards.
- Leave you vulnerable to thieves.
Unlike credit cards, which you get in the mail only when you apply or when your card is renewed or replaced, convenience checks are sent out at the issuer’s discretion. They can be plucked out of your mail and used by thieves.
“You don’t know when they’re coming. . . . These things just sort of appear haphazardly,” said Tena Friery, the research director for the Privacy Rights Clearinghouse. “You don’t have the opportunity to watch for them, so they could go missing and you’d never know (until) you saw your credit card statement.”
After reading this information I thought it was very important to pass it along to those of you who have yet to read about this. So keep your eyes out for these, especially drinng the holiday season because many credit card companies are vying for you to spend on their cards for your holiday gifts.