Credit Card Convenience Costs

Your credit card comes with a pin number, and can be used just like a debit card to withdraw cash from an ATM. However, this money is considered a loan or cash advance, and you will not only be assessed a fee by the credit card company, but you will be charged interest beginning the moment you withdraw it. In addition, the interest charged may be higher than your normal rate. Therefore, it’s not a good idea to use this method of getting cash unless absolutely necessary.

Another annoying practice that many credit card companies have is periodically sending out convenience checks to be used “just like cash”. Because these also are cash advances, they have the same high fees listed above. As soon as you use one, you begin paying interest – usually at a higher than normal rate. Quite often there is a fee tacked on as well. It’s not a bad idea to call your credit card company and ask that they stop sending you convenience checks. If they were delivered to the wrong address, or stolen from your mailbox, someone else may find them very convenient.