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I received a convenience check offer from Chase. The checks incur a 3.99% APR for one year, and there is no transaction fee (no usual 3% of the amount).

I have committed to pay $500/mo in Jan, Feb, and March to help pay for the costs of caring for an elderly relative. I am considering writing a convenience check to myself for $2,000 - with $1,500 of it going into a savings account to pay out $500/mo, and $500 using to finish off a higher interest credit card.

I have a monthly surplus in my budget of about $500/mo. I don't particularly care about the $40 or so in interest that this check will cost me over the course of a year, and I plan to pay it off much sooner than that anyway. I pay about $25/mo in finance charges anyway on that higher interest card, which this would alleviate.

As far as I can tell, this is a good idea for me to do. Anything else I should consider?

Thank you!

3 Answers 3

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Read the terms carefully.

With promotional offers, if you do anything "bad", the promotion is terminated and you immediately revert to either your normal rate or a penalty rate. "Bad" includes things like: making a late payment, going over your limit, paying less than the minimum payment, etc.

I wouldn't sweat the potential credit score impacts. These promotions are pretty much the best deals that you can get for an unsecured loan.

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    "late" is an interesting thing. I took a $15000 cash deal at zero % as the maximum fee was $50. So I sent it to my 5% mortgage. A few months into it, to my horror, I found the monthly bill stuck in a magazine, and it had gone past due. (yup, I screwed up. I am human, it happens.) I called the bank, and they said I'd have a $25 late fee, still zero interest, and no report issue as it wasn't 30 days late. A cheap lesson to learn. But a warning about keeping track of bills, especially new ones you are not used to paying. Dec 19, 2011 at 14:34
  • @JoeTaxpayer - Well we had an issue with our payment(auto-bill-paid on due date normally 20th of each month) because the due date was a Saturday our bank processed the payment but Chase did not process it till Monday(technically 2 days late). Then they used that as an excuse to raise or 8% rate to 19.9%.
    – user4127
    Dec 19, 2011 at 17:03
  • @chad - I considered myself lucky. Was prepared to cut a check for the full balance as I expected the deal to get canceled on me. In your case, I'd call Chase. What was their due date? When CC bill has Sat/Sun due date, they have to accept a Monday payment. Dec 19, 2011 at 17:09
  • Yeah we didnt realize it till 5 months after when we looked at the rate and noticed it was up. We talked with them and they said had we addressed it earlier they would have reversed it but we waited to long... I suspect they hope for that. But we no longer have that card anyway but it was nice because it was a super low rate that no one offers anymore.
    – user4127
    Dec 19, 2011 at 17:11
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I tried this a few months ago when I got one from Chase for 0%. Thought it might be fun to play with, maybe make some money with the interest elsewhere over the 6 months. Read the term and called Chase for more information on these and didn't see any issues at first.

The big thing that got me was that the rest of my account (not the money from the convenience check) was converted so that interests accrued on a daily basis even if you paid it all off at the end of the month. So even though I was making the required payments that would normally not incur any interest, just by having the convince check balance on my account I was being charged the interest for my normal credit card charges over the month.

The amount of charges came out to only be around $10-$20, so wasn't much of a loss really. But something to keep in mind when using these, (I tried it with 0% APR and still couldn't get away from the interest). If I had needed the money this would still be an excellent way to go. But if your trying to beat Chase with this game, it doesn't work... Although if you don't use the card for anything other than the convenience check it's free money (or cheap @ 3.99% in your case)

Everything in my account went back to normal after it was paid off, so no harm really, but some things to keep in mind at least.

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Well, you might take a minor hit to your credit score. This is snapshot of my credit utilization written for an article on my site. The point there was that zero card use actually dinged the score, but for you, going over the 20% level is the risk. It's not too large a hit, depending how high the utilization goes. I'd not lose sleep over it. Kind of you to help.

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  • Thanks for the information, this is good to know. I agree, it won't really affect my decision for this, but it's good to know what percentage of credit utilization puts me in the "A" vs "B" categories.
    – Jeremy
    Dec 19, 2011 at 2:33

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