Credit Card Q&A: The Scoop on Balance Transfer Checks that Show Up in the Mail

Credit card question: I’ve been getting balance transfer checks in the mail from my credit card issuer. Are these a good deal?

Answer: This is a question I’m getting a lot lately. I’ve been getting these checks, too. If you think about it, this is the perfect time to tempt consumers with easy money. The holidays are approaching and many people need a little extra help this year.

These checks look similar to your own personal checks, don’t they? But the balance transfer checks are quite different. You can use these checks to consolidate balances on higher interest credit cards, give yourself a personal loan or even pay for merchandise.

I can’t really give one-size-fits-all advice because these checks differ by issuer and cardholder. Sometimes you’ll get a zero percent intro APR on your balance transfer check. Or you might only get an APR that’s around 3.99 percent. I’ve received a set of checks where each check had a different intro APR. So look at each check carefully before you even think about using one.

If you’re not given an intro rate, then you’re paying your full APR on any amount you write on that check. You also might be subject to balance transfer transaction fees, which run 3 to 5 percent.

Here’s the rub: If you’re looking for a true balance transfer offer, you’re often better off applying for a new card with an extended zero percent intro APR on balance transfers. It sounds funny but card issuers often treat new customers better than their existing ones. Whatever you decide, just be sure you read all the fine print before using the checks so you don’t get burned on transactions fees and APRs.

Image: henna lion, via Flickr.com