What to look for before cashing in.
Have you ever wondered why you got a blank check from a credit card company? Before you take it to the bank, learn more about what balance transfer checks and how to use them.
What’s in this guide?
What are balance transfer checks?
Balance transfer checks work much like normal checks — only instead of drawing from your bank account, they draw from your credit line. A credit card provider will send out balance transfer checks tied to a credit card you already have open, or to a card you prequalify for. The checks can be used to pay accounts outside of the issuing provider.
The card tied to the offer doesn’t necessarily have to be a card you got for the purpose of a balance transfer. It could simply be one that allows balance transfers and has unused credit.
Usually balance transfer checks come with promotional terms, often intro APRs starting at 0% — depending on your creditworthiness.
Which brands offer balance transfer checks?
| Credit card provider | Offers balance transfer checks | Offers convenience checks |
|---|---|---|
| American Express | ❌ | ❌ |
| Bank of America | ✅ | ✅ |
| Barclaycard | ✅ | ✅ |
| Capital One | ✅ | ✅ |
| Chase | ✅ | ✅ |
| Citibank | ✅ | ✅ |
| Discover | ✅ | ✅ |
| HSBC | ✅ | ✅ |
| USAA | ✅ | ✅ |
Compare our top picks for balance transfer cards
How can you use a balance transfer check?
Using a balance transfer check is fairly similar to using a normal check. You’ll just want to fully understand its terms before signing off on it.
- Know the terms. To truly get the most out of the transfer offer, make sure there’s a low or 0% introductory APR, and that you can use it before the rate expires. Also, check for any balance transfer fees you may incur.
- Fill out the check. Make the check out to the high-APR credit card you want to transfer, or to yourself. If you’re cashing it yourself, check what additional fees may apply and what the standard APR will be.
- Wait for the transfer to process. Depending on the account you’re transferring from and to, this time will range. If it’s not immediate, be sure to continue making the minimum payments on the old account until it processes.
Pro tip
If you’re unsure whether a check is going to act as a cash advance with high fees, call the bank that sent it to you. Better to find out before you cash it.
Is using a balance transfer check a good deal?
Balance transfer checks can be a good deal if the rates are lower than what you’re paying. Here’s how to tell if a balance transfer check might be the right fit for you:
- Intro APR.
Introductory windows vary based on the lender and your creditworthiness, as do promotional rates. If you can’t pay off a large balance you want to transfer before the period ends, or if the intro rate is over 0%, it might be worth skipping. - Revert APR rate.
After the introductory period is over, the provider applies a revert APR rate to any remaining balance. Be sure the interest rate is either less than what you’re transferring from or that you can pay the balance off fully before the intro period ends to avoid paying more. - Balance transfer fees.
A typical balance transfer fee ranges from 3% to 5% of the transaction. Balance the cost of the fee with the interest you’ll save to determine if it’s really worth it.
Not all balance transfer checks will have offers that are worth pursuing. For longer APRs or lower balance transfer fees, you may want to consider taking out a new balance transfer card after comparing the options available.
If you’re not sure how long you’ll need to pay off your balance, you can use our balance transfer calculator to get a quick and easy estimate.
Why am I getting this offer?
You may notice balance transfer credit card offers coming from a different bank than your current card provider. Balance transfer checks are a benefit that some providers use to earn your business from competitors.Balance transfer checks vs. convenience checks
If you get a check in the mail from your bank or credit card provider, it could be a convenience check. Typically, you can use them to make purchases or as cash advances instead of using a credit card.
But be careful — they often don’t come with an intro APR, and in fact, can accrue the same high rate as a cash advance. You could also be charged a convenience fee as high as 4% of the check amount.
Balance transfer checks usually offer some sort of incentive — a lower APR or longer terms and no fees. And they can come from a bank or credit card that you don’t already have a balance with.
What to look out for
- Revert rate. Once your intro APR window closes, you’ll wind up with a higher APR. Any balance you haven’t yet paid off begins earning interest just as it would with any other credit card.
- Costly cash advances. When a balance transfer check acts as a cash advance, it carries a higher interest rate.
- Transaction fees and finance charges may apply. You could be on the hook for transaction fees as high as 5% of the borrowed amount.
How to stop these offers from coming
If you’re not interested in balance transfer checks clogging up your mailbox, send the credit card issuer a secure online message, mail or call them directly to tell them to stop. If it’s a local bank, you can visit a branch and make the request in person.
Balance transfer checks can be tempting and have the potential to get you into financial trouble. They also can lead to fraud if someone finds them and cashes them in your name. Always shred these checks if you don’t plan on using them.
Bottom line
Looking into the different types of balance transfer cards and comparing them against balance transfer checks can make a big decision easier. The option to convert your debt to a lower APR is tempting but look at your financial situation to make sure the credit card suits your needs before signing up.
When you use a balance transfer check to pay off an auto loan can you write the check for more than the loan and have the bank give you the difference?
Hi Susan,
Thanks for your question.
Generally, when you request a balance transfer, you’ll have to provide the details of your current lender you have a balance with. A balance transfer check is then written directly to that lender or to yourself. In either case, the amount written is the total debt you owed with the lender you listed. Kindly note that the amount of the check will also depend on how much credit limit you have.
This is just a general rule, other banks may have exceptions. You may have to directly call the bank where you are transferring your balance to and inquire if this is possible.
Cheers,
Anndy