Legality of Credit Card Check Thing

Death of Rats

So I owe about $500 on a credit card at 19% APR. I just got some of those "18 month 0% APR" checks from the same credit card company (I only have 1 credit card). The checks say that you can use them as regular checks, even going as far to say that you can use them to put money in your bank account if you so wish (they're kinda a "use these to Christmas shop" deal).

And I was thinking, if I borrowed money from someone to pay off the whole thing, and then once that cleared in my account, payed that person back with one of the checks I'd owe around $500 with 0% APR.

There are only two things on the checks that have to do with how I can possibly screw this up. One is that if you have a regular balance on your credit card interests will still be accrued from it. The other is that if you're late on your payment two times within 12 months the APR will go back up to your normal APR. Seeing how I don't have a problem making my payment or with not using my credit card I don't think these two things are things I'll screw up.

But there's also something in the fine print about not being able to use the checks to pay for your balance on your account. Would what I'm thinking about doing go against this rule? And if it would, would there be any way they would be able to spot it (I pay off my balance and then they get a check for close to that amount made out to someone I know. Would they be able to spot this? If so, what would they do?)

Also if there's a downside to this that I may not think of, mention it. I'd really like to have my full payments going to what I owe each month.

musanman

first make sure there is no interest on the checks

also realize the interest is RIDICULOUS on those things...different than your card's rate

If you have any balance left on your card at the end of your 0% trial it will accrue all of the interest that money should have accrued...so be careful.

overall I'd recommend shredding the checks and just biting the interest on that $500 until you can get the cash. Pay it off as much as you can and you won't get pounded too hard.

AtomBomb

You would have to be careful about making sure the person waited for a bit to cash the checks. If the check is cashed before you've paid off the card, the company is going to apply your payment towards the 0% interest portion of your debt before the rest of it. I've found the best way to use those 0% checks is to transfer your balance from one card to another. I did this between Discover and Amex, to avoid paying interest while I was paying off my debt. I also did a couple "transfer your other balances to us at 0% for X months" until I was paid off. However, if your credit sucks, that may not be an option.

First thing I would do is call the company and ask if you can write the check to a private party. Tell them you want to pay back a friend you've been borrowing money from. If that's okay, and your friend waits long enough to cash the check, I suppose it could work.

Judge-Z

Read the fine print. Those 0% APR checks often trigger the cash advance fee for your credit card - which could add to your balance.

Thanatos

Judge-Z wrote: »

Read the fine print. Those 0% APR checks often trigger the cash advance fee for your credit card - which could add to your balance.

This. It almost certainly does, and those fees are usually around 5% of the amount, or some arbitrary minimum (whichever is higher). Unless you don't think you'll have that paid off in three months, it's not worth it, and even if you do think that, it's probably not worth the risk of the additional interest, anyhow.

Crashtard

Seems like if you're going to go the borrow money route you could just borrow $550, use whatever it takes to pay it off, give the person the balance back and a check for the rest.

Edit: Didn't see Thin's post; they're right. Can you not just apply for a different 0% intro balance transfer card and transfer it?