CWR Building Wealth – Crazy Checks
By Dwight Harshaw, BBA, Personal Finance Counselor
We all receive them, mailings from credit card companies that contain checks-that were not ordered or requested. I must confess that I have used one. I’ve taken advantage of a zero percent transfer fee, no interest offer-which is rare today-to pay off the balance of another credit card that I could have paid anyway. I remember it felt good initially but for months afterwards, it was a burden to pay the loan back. Fortunately I was able to pay it back within the designated time period and suffered no repercussions from using it. I was lucky. Many are not.
The marketers of debt do all they can to entice us to use their crazy checks. The checks can be used to pay off debt, make purchases, or deposit money into bank accounts. The credit card companies want to make sure that we have money to spend-up to a defined limit because they are not crazy-with strings attached. The strings or terms for using the checks are not hidden. There is a time period in which the interest charged will be zero or very low, provided that you make your payments on time. There is a transfer fee that is capped at a nominal amount. They are almost like regular checks, right? Wrong!
Many people use the checks, experience setbacks, and their terms change. A delayed or missed payment can cause you to pay more fees and high interest. It is all there in black and white in the terms and conditions, read it.
When you receive unsolicited checks in the mail from your bank or credit card company, tear them up. Using them is almost as bad as writing a hot check. They are not money substitutes, they are loans. They are a clever way for issuers to keep you in perpetual debt. It is too easy to overextend yourself. And when you are overextended you can’t build wealth.
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About Dwight Harshaw: Dwight Harshaw is a personal finance counselor and writer. He is also a Realtor with Access Realty, Inc. in Little Rock, Arkansas. He has a BBA from the University of Arkansas at Little Rock in Finance with emphasis on financial planning.