Sunday, November 4, 2007

How Much You Know About Credit Card Checks

Credit card companies have worked on numerous innovations and are constantly evolving to create a better experience for card holders, one of the latest innovations in credit cards is credit card checks. Just like a regular bank accounts even credit cards offer customers the facility to use credit card checks. Credit card checks are particularly useful when payments have to be made to organisations that do not accept credit cards. Also credit card checks are increasingly popular as being backup cash reserves. In the course of this article I will explain how a person can use credit card checks effectively and what are the pros and cons of credit card checks.

Let’s take an example, say a card holder has actually issued bank checks for amounts more than what he has in his bank account. Today banks charge up to $35 for a bounced check the question is, can a person deposit funds into his bank account using his credit card? Yes, by depositing a credit card check in the account, the card holder can ensure that none of his checks bounce, and once he has adequate funds he can then pay the credit card company as he usual. Similarly paying utility bills like electricity bills are also simplified by issuing credit card checks when there is no available balance in the bank.

Another useful application for credit card checks is paying organisations that do not accept credit cards or do not have equipment to process credit card payments; by issuing a credit card check a card holder can use his credit card in places where it was previously not possible for him to use his credit card. All in all credit card checks are another way to make payments and maximise the benefits that a credit card has to offer.

Credit card checks are not free

Unlike bank checks that usually have no charges associated with issuing them, a credit card check charges an interest each time a check is issued, the charges for issuing a credit card check vary from company to company, but almost all credit card companies charge fees for ‘processing’ the check issued. If you are looking for a credit card that offers checks, make sure you choose a credit card that has low fees associated with credit card checks, also most credit cards do not charge additional fees for issuing credit card checks for a limited period of time, make sure you understand clearly the duration during which you will not be charged fees for issuing a credit card checks.

An additional downside with most credit card checks is that when compared to a regular credit card, most credit card checks do not generate any reward points or incur any cash backs. In the long run issuing too many credit card checks may not be a good idea, as not only are you paying additional fees for issuing a check, but you are also not getting reward points that you would have otherwise received by using your credit card.

How to use credit card checks

Credit card checks are a new concept when compared to other credit card innovations, and in time this credit card innovation too will improve. However, the current scenario for credit card checks is simply that credit card checks are best left used for emergency purposes and making payments when there are no other options available. As it stands credit card checks incur heavy charges if they bounce, and the interest rates associated with credit card checks are also high. There is no denying that credit card checks are a brilliant innovation, but there are a few things that are going against them, this is expected to change over a period of time.

If you are a credit card holder and have the opportunity to use credit card check make sure you are fully aware of the charges that are associated with each credit card check you issue. As mentioned earlier credit card checks are not free, so you are better of using credit card checks during the promotional period when they are free, or else for emergency purposes.

Before you use any credit card, not just credit card checks, you should read the terms and conditions of the credit card and clearly understand the charges that are involved, and also the APR that you will incur when you make check payments or other larger payments.

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