Let’s face it…credit cards suck. Well, at least when you carry a balance from month to month. Sure, you can get some great perks with your credit cards, but unless you are extremely diligent and organized (See “Organizing Your Finances – Part 1” and “Part 2“), these perks can cost you more in interest than what the given benefits are worth. When paying off debt, specifically credit card debt, taking advantage of balance transfer offers can make these cards suck a little bit less. (These offers do also come in the form of checks with a low or zero APR for a certain amount of time).

As I have mentioned in the past, the debt that my wife and I are currently working to pay off comes in different forms (which is pretty “normal” for the typical U.S. household). In order to better manage our credit card debt, we use these transfers/checks any time that we have the chance and when it makes sense to do so. As a matter a fact, I just used one of these checks the other day. Because of these offers, over 90% of our credit card balances have a 0% APR, which is a great way to be able to pay off debt faster!

How Balance Transfer Work

Although in the end balance transfers and convenience checks can leave you with a low promotional APR, there are differences between the two. Balance transfers are used when you simply transfer a balance from one credit card to another. These transfers are mostly offered at a low rate, however sometimes they are only available at the standard rate (in this case I do not recommend using them since there is little benefit).

Also, when using a balance transfer, there can be a fee typically between 1% and 5% of the transfer amount. Additionally, the rate is only good for a specific time, such as 6, 12, or 18 months. Occasionally there are times when a transfer is offered at a promotional rate for as long as you need just as long as you make at least the minimum monthly payment. (I haven’t seen one of these in years!) To take advantage of one of these, all you need to do is login to your credit card account online or call your credit card company to see if a transfer offer is available. You provide the credit card number of the account you want to pay off along with the amount.

How Convenience Checks Work

Unlike balance transfers, convenience checks are actual checks that come in the mail from the credit card company. These checks can be written to pretty much anyone, just like a check from a checking account. Then, the amount of this check posts to your credit card at the specified promotional rate.

This is the method I like to use as opposed to the balance transfer. When I get these checks and want to take advantage of an offer, I simply write the check to myself and then deposit it into one of my checking accounts. It typically takes a couple of days to post. Once it does, I then use the funds to pay off a higher interest debt or use it to pay off a debt with a promotional balance that will expire soon.

When using one of these checks, there is typically a small fee, such as 2% or 3%. When writing one of these checks, it is important that you do leave enough credit left to include the fee.

Fair Warning

There are a few things to look out for then using either one of these options. First, pay attention to dates. These offers are time-sensitive. In order to take advantage of one, it does need to post to your account by a certain date.

Next, pay attention to terms. If you take advantage of an offer that gives you 0% for 18 months, make sure that one way or the other, this is indeed paid off within 18 months. If it is not, your transfer amount is now subject to incurring interest, which defeats the whole purpose of using it anyway.

Lastly, if you do decide to use one of these offers, DO NOT use the same credit card for additional regular purchases. Although rules have changed and many times payments to go toward the highest interest balance first, by having a purchase to pay off in additional to a transfer on the same account, the payoff is only delayed.

To Wrap Up

Convenience checks and balance transfers are great options to have that can help to minimize debt and lower the total amount of interest paid. When used appropriately, you can help your financial situation may saving money in interest. It does take diligence to be able to keep track of these, especially when you have multiples, but this can make all the difference when trying to minimize total costs. I love these offers and by noting the terms of each, I am able to stay organized.


What do you think about using balance transfers and convenience checks? Do you use these to your advantage or do you try to avoid them? What method has worked best for you to cut down on interest payments and move faster toward debt freedom? I would love to hear from you in the comments below.

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