(National) Feb. 9, 2005 - The blank checks from credit card companies that arrive in your mailbox look like a quick, easy way to get some money. One such offer from Discover Card says "use these checks for cash or anything you want."
But, Lisa Lee Freeman, Deputy Editor of Consumer Reports Money Adviser, cautions the so-called "convenience checks" can cost you plenty, "Two things you have to watch out for are transaction fees on each check, which can be substantial, as well as balances that can grow out of control at high interest rates."
For example, with the Discover Card checks there's a transaction fee of three percent on each check, and the interest rate is 21.99 percent.
Sometimes the checks promise low promotional interest rates, like one offering a .99 percent APR. But, if you already have a balance on your credit card, Lisa says watch out, "The credit card company is going to apply any future payments first to that low-interest rate debt, leaving the high-interest rate debt to pile up."
Consumer Reports says the best thing to do with these checks is shred them.
Consumer Reports Money Adviser says it's important to shred credit card checks, because if they're stolen you don't have the same protection you do with a stolen credit card. With a credit card your liability can't exceed $50, but with the checks, there's no automatic limit to your liability.
by Troubleshooter Judi Gatson
posted 6:00pm by Chris Rees