If you have a credit card you have probably received those nifty checks in the mail from your credit card company. Some call them “convenience” checks and I am sure there are other appealing-sounding names for them, depending on the company that is promoting their use.

As you may suspect, the idea behind these checks is to get you to charge more on your credit card account. The more you owe, the more interest you pay and the more interest you pay, the richer the credit card companies get.

Many credit cards are also charging pretty outrageous interest rates these days and you can bet they are laughing all the way to the bank. A bank that they probably own as well!

Credit card companies make vast fortunes by keeping people in debt. That is the life-blood of their business. If you ever take the time to do the math, you can see that the “minimum payments” you are required to make each month don’t include a very impressive amount of principal (the amount of your payment that is actually applied to reduce your debt), which is certainly no accident. In some cases, depending on your debt, it could take decades to pay off your credit card debt by making the “minimum payment” each month.

In many cases, the payments you make include very substantial interest payments. More than you might expect. Take a look at the detailed breakdown of your payments that is included on your bill each month. You may be unpleasantly surprised.

Where these nifty checks are concerned, the devil is in the details as it almost always is when dealing with big financial companies.

When I was short on cash a few years ago our water heater decided it was time to quit working and we had to replace it with a brand new one to the tune of about $1400.

When something like a water heater breaks down, you really don’t have a lot of options and you really have to replace it right away. It’s not something you can normally put off for a month or two.

I remembered that I had received bunches and bunches of those credit card checks and saved them in case we needed them for some kind of emergency. This seemed like just the kind of emergency I had planned for.

I wrote one of those checks to the company that replaced the water heater, thinking at the time that it was just like using my credit card. I was wrong.

I did not find out until later that I was charged a $75 fee for using the check. It was foolish of me to neglect reading the details that were in the fine print on the paperwork that arrived with those checks. If I had known it was going to cost me $75 just to use one of those checks, I would probably have found another way to pay for the water heater.

These checks often impose a fee that is equal to a percentage of the amount you make the check out for. The fee is 3% for the checks you can see here that I received from Chase recently.

As you can see, they use a lot of promotional language in the letter that comes with these checks. The are offering me a 0% interest rate until January on any money I borrow using some of these checks.

Let’s see, if I write one of the first two checks in the sequence today, the amount will probably not show up on my bill until August or September, which gives me 4 or 5 months of interest-free payments. If I write a check for a couple of thousand dollars and make the minimum payments every month, that is not going to be much of a savings in the long run.

If I write one from the second two in the sequence, they will charge me a 4.99% fixed rate until the balance is paid off. That does not sound all that bad, but don’t forget the fee that will tacked on to my bill for using one of these checks. That would amount to $60 if I were to write one of those checks for $2000.

I’m sure there are other deals from other credit card companies that are a lot worse than this one. Just make sure you know exactly what you are getting into before you decide to use one of those checks that the credit card companies are sending out.

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