Balance Transfer Checks

Balance transfers are great, but sometimes you may need cash to pay off something other than another credit card.

Fortunately, there is a simple solution. Similar to credit card balance transfers are “balance transfer checks,” which offer a lot more flexibility than the former.

Balance Transfer Checks Typically Wind Up in Your Mailbox

Balance transfer checks may be delivered to you by mail in the form of an unsolicited offer, or can be requested online at your credit card issuer’s website.

They’re essentially blank checks (that you can fill in just like a normal check) up to your credit limit, which can be used for really any purpose.

For example, you could make the balance transfer check out to yourself, and deposit the money into your checking or savings account. It could then be used to pay for anything you please, whether it’s a bill or an unrelated purchase.

If the associated offer is a 0% APR balance transfer, or better yet a no fee balance transfer, you could get your hands on some cash at no cost to you (enter balance transfer arbitrage).

Of course, you wouldn’t want to spend that cash unless you knew you could pay it back before the 0% APR period expired. Heck, who wants to pay credit card finance charges?

You could also use a balance transfer check to pay off another person’s credit card balance, such as a spouse or family member with bad credit.

This can be really beneficial if they can’t get approved for a balance transfer credit card, and you trust them enough to pay you back. Just be careful, because you’ll be on the hook for any checks you cash.

Balance Transfer Checks vs. Balance Transfer Credit Cards

The biggest difference between the two is that a balance transfer check can be converted into cash, a big plus for anyone who wants cash at a low rate or even at 0% APR.

In my experience, Citi and Chase seem to be the biggest issuers of balance transfer checks.

Conversely, a standard balance transfer offer will usually only allow you to pay off other existing balances, namely other credit card balances. So really standard credit card balance transfers are only good for those with existing credit card debt.

Just be sure to understand that balance transfer checks, like ordinary credit card balance transfers,come with terms and conditions that must be adhered to, such as minimum payment requirements, and may also be subject to finance charges, so take caution and read the fine print, twice!

They’re certainly not free money, and must be paid back!!!

Tip: Don’t confuse balance transfer checks with cash advances or cash advance/convenience checks, which often come with sky-high APR at the outset.

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