What Is a Credit Card Check & How To Use It

credit card check

Have you ever needed checks and received them from your credit card issuer? Probably, yes. They periodically come to the mail address of card holders. You don’t even need to make the corresponding requests.

Such checks are usually used to redeem other cards, pay for purchases, and withdraw money from the line of credit.Many people enjoy using a credit card check, while others dislike the high-interest rates associated with cash advances. 

So, is it worth using them at all? Are there other better and more profitable alternatives? In this article, you will find answers to these and other exciting questions. Try to study the material carefully.

What Is a Credit Card Check?

According to experts, a credit card check is one of the most common ways to dispense cash. It is often referred to as an ‘access’ or ‘convenience’ check because it allows using the credit line to conduct purchases that a plastic card is unsuitable for. 

The issuer usually provides customers with two types of checks:

  • Advance check
  • Balance transfer check

Advance Check

All that is required to receive cash advances is the existence of a credit account. After telling the issuer how much money you need, you should expect approval or rejection. If approved, the money goes to your personal bank account. 

The issuing corporation may also send you a so-called advance check to the specified email address. By filling out a convenient check with the necessary information, you can easily receive money from your bank.

It becomes obvious that this type of check implies cash receipt rather than transferring money between different accounts. It is often used for:

  • Covering unexpected expenses;
  • Payment of various bills;
  • Payments for purchases made in cash (when payment by card is impossible).

The issuer defines the maximum amount of money that can be obtained upon request.

Balance Transfer Check

Another type of access check is a balance transfer check. It allows you to quickly and securely transfer funds from one payment account to another. However, pay attention that the transfer amount should not exceed the limit.

The main features of this type of check are due to the specifics of its use. A balance transfer receipt is directly used to transfer the balance to another card. In this case, 3-5% commission is usually charged. Consider a short example of how this works:

  • Let’s say you have $3,000 American Express debt and need to pay it off as soon as possible. You get a check from Citi;
  • You fill in the balance transfer check with the necessary data;
  • The required amount is credited to your personal account. It is then automatically transferred to American Express, and the amount of money in your account becomes $0;
  • Now, you owe Citi $3,000 plus fees.

When Does Using a Credit Card Check Make Sense?

Access checks are not intended for daily use. However, they confirm their effectiveness in certain cases:

  • Credit card check allows you to use the money from your credit line in cases where it is not possible to use a plastic card. An example may be the need to pay rent for housing. Since a card is not always convenient in this case, it is more appropriate to use a convenience check for payment;
  • Access checks are a lifesaver when it is not possible to use a checking account. To receive cash, write an advance check in your name and cash it out;
  • As a rule, issuers do not authorize the payment of a card bill by check provided by the same issuer. But still, it can be used to pay the bill of another issuer. It is very convenient, and many resorts to using such services.

There are a lot of benefits of using convenience receipts. However, you should not forget that they work on the same principle as cash advances. Advance payments, higher interest rates, and various repayment penalties are provided.

What Should Be Considered Using Credit Card Checks

Everyone who uses checks should be aware of several important nuances. These involve fees and interest rates, impact on credit score, less purchase protection, etc. 

Please note that convenience checks do not include a grace period. Once you start using it, interest accrues instantly. If no action is taken and the fees are not repaid, the interest will continue to grow.

When using access checks, paying close attention to the advance withdrawal limit is recommended. It may differ from the total card limit. If you exceed the advance limit, you can get a fine. Learn about other important nuances below.

Fees and Interest

The typical annual cash advance varies from 25% to 30%. Compared to the average card interest rate, it is much lower and amounts to 14.51%. Due to the lack of a grace period, interest accrual starts immediately after the check is issued. 

As for the transaction fee, it is 3-5%. It is not difficult to calculate it yourself. Thus, for example, if you fill in the check for $1,000 and your card has a 4% transaction fee, you will need to pay a $40 fee in addition to the general interest.

Credit Score Impact

If you use convenience checks with maximum responsibility and comply with all requirements, then this should not negatively influence your score. The main condition is to maintain a card balance at a low level and make timely payments. 

The debt ratio rises when you borrow a large amount of money. At the same time, your credit line also increases accordingly. In this case, the overall score may decrease.

If a credit card check is used to transfer money from different checking accounts, bank officials may detect excessive activity on your credit report. This may lead to the need for additional tests and a lower score.

Less Protection on Purchases

When making a purchase, everyone wants to know that his/her rights as a buyer are protected. While a card provides full protection, receipts don’t provide many of the advantages. For instance, you will not be able to withhold payment if there is any problem with the product you are buying. 

You also will not receive your money back if you pay for a defective product with an access check. You will need to contact the seller directly and negotiate the possibility of a refund, which is not always successful. 

Therefore, when purchasing goods or services with a check, be especially careful. After all, less purchase protection means that all responsibility lies with the buyer.

Are Credit Card Checks Safe to Use?

When deciding to use checks, you may encounter some security concerns. Consider this list in more detail:

  • Absence of grace period. Unlike cards, which offer the possibility to repay interest within several days or even weeks, access checks don’t. Due to the lack of a grace period, the starting date for the beginning of the interest calculation is the date of issuance of the check;
  • Tricky promotional offers. Many issuers use quite cunning advertising moves in order to attract customers. Thus, for example, you may get a lower commission during a certain period. As a result, the commission will increase significantly further, and you will have to pay several times more;
  • Possibility of identity theft. If you keep your checks in your mailbox or leave them in plain sight for long periods of time, your data may be at risk. Due to the lack of protection, fraudsters can steal information and use it for bad purposes;
  • Dispute process. The use of convenience checks does not involve a dispute resolution process. If there are any problems with your purchase, they can be resolved directly with the seller;
  • Over-limit penalties. If you use a credit card check to get more cash than your credit limit, you are likely to receive a fine. This is because exceeding the limit is not allowed by the issuer.

The Cost of a Convenience Check

If you are concerned about the cost of using a convenience check, pay attention that it includes two components: the transaction fee and the annual interest rate. The transaction fee is defined as a percentage of the total check amount. 

Thus, if your card has a 5% transaction fee, you will need to pay $50 if you fill in a check for $1,000. The annual interest rate varies from 25% to 30%. Nevertheless, a credit card check sometimes comes with an annual interest rate of 0%. 

But this is available only for a certain time and provided that the balance is transferred to your own card.

Can I Order Credit Card Checks From My Credit Card Company?

Ordering a credit card check from the credit card issuer is possible. It sends them by mail regularly or as part of a promotion. Therefore, a request from the client is often not even required. 

Nonetheless, some issuers provide checks to credit card holders with a certain degree of creditworthiness. In this case, the possibility of using a check. Despite this, everyone can submit a request to the firm and receive approval or rejection.

Bank of America

Bank of America is one of the leading American banks today. It provides all types of financial services for individuals, small and medium businesses, corporations, and wealth management for wealthy private clients.

Bank of America issues convenience checks to its customers. The basic requirement is a 750 score and above. However, receiving a check with a lower score or a not very successful credit history is possible. The bank charges a fee of $15. 

If registered in the Preferred Rewards program, checks are provided to the client free of charge. Therefore, it seems to be quite advantageous to use a credit card check from this company.

Wells Fargo

Wells Fargo is one of the biggest American banking holdings. Wells Fargo’s business model in global markets is to diversify its services in an effort to meet the full range of customer needs. Thus, the corporation provides banking, financial, and insurance services. 

The corporation receives 80% of its profit growth by selling a large number of services to its existing customers. The business model of the corporation is quite successful today.

The card checks issued by the company are called ‘superchecks’. The bank is very strict about issuing checks. In each individual case, the client’s credit report is considered. The fee for using checks is 5%. Annual interest rates range from 24.99 to 26.99 and directly depend on the client’s score. The annual interest rate is lower if the score is higher.

American Express

American Express (AmEx) is the largest American diversified company. It provides services in the field of tourism, issues and services card products, and traveler’s checks. Traveler’s checks can be easily bought and used as cash. 

As for convenience receipts, they are not provided. This is spelled out in the agreement signed by every American Express cardholder.

PNC Bank

PNC Bank is one of the largest diversified US financial services companies providing deposit and loan products, money management, and investments. It provides its customers with access checks. 

Customers using a check from this company pay 4 percent of the total amount. There is a limit on the available amount of money that can be used with a check.

Citizens Bank

Citizens Bank offers consumer loans, mortgages, commercial loans, deposit products, internet banking, and trust services. Among the services of the firm, there are also convenience receipts. 

They represent a cash advance that is available up to the total credit limit of the cardholder. The commission for using a check is usually 3 percent. The annual interest rate is 23.24 percent. Thus, fees are favorable for customers.

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Alternatives to Credit Card Convenience Checks

There are several great alternatives to checks that you should pay attention to. Review the table below.

Alternatives to convenience checksDescription
Personal loansA personal loan is a good way to get cash. Interest rates, in this case, will be much lower.
Borrowing money from friendsYou can always ask your friends to borrow money. By making a clear repayment plan, neither the borrower nor the lender can worry about the risks.
Performing various side hustlesThe most effective way to get money is to earn it. Various side hustles (Uber, etc.) will be a great solution to the problem and help you receive the necessary amount of cash.

In Conclusion

So, in this review, we have examined in detail what convenience checks are, what advantages and disadvantages they have, whether they are safe to use, etc. Analysis shows that credit card receipts are not used daily. But there are situations when their use is fully justified. 

Everyone who uses convenience checks should carefully study the main nuances (higher interest, less purchase protection, etc.) so as not to be at risk as a result. Requesting a check is not difficult, but each facility has its own requirements, fees, and rates that are also important to consider. There are some great alternatives to convenience checks that everyone can use.

FAQ

Can I write credit card checks to myself?

If you have a credit card from one of the modern banks, rest assured that you can receive a check and cash it. For this, you just need to contact the issuer company with the appropriate request.

What can I do with credit card checks?

A credit card check allows borrowing money, transferring card balance, transferring credits to your personal card, paying bills, and so on. Such checks can also be used to access available credit on your card.

Can I buy traveler’s checks with a credit card?

Both debit and credit cards are recognized and accepted in different countries of the world today. Therefore, having a credit card, you will certainly be able to buy traveler’s checks, which can be very helpful even for those who use them for the first time.

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