If you’re struggling with debt, you’ve probably considered a balance transfer before. While the more popular way to go about actually transferring your balance from a high-interest credit card over to your zero or low-interest one usually just requires a quick five minutes to do so online or a call to a customer service rep, there is one other way the transfer can be done — via a balance transfer check.
If you go the balance transfer check route, you’ll be receiving the check directly from your credit card company in order to withdraw cash from your credit line. Once you have the check in hand, you’ll have a couple options:
- You could make the check payable directly to the company which holds your debt, or
- You can make the check payable to yourself in order to get a cash deposit.
In the second scenario, the only real difference is that you’ll be paying your debt off directly from funds transferred from your new balance card into your checking account rather than putting the debt onto the new card to pay off that way.
Still confused? Consider an example. Let’s say you owe $3,000 to a furniture store that you used to furnish your new pad, and you’d like to pay that debt off using a zero interest credit card. In order to go the balance transfer check route, you would simply apply for and open a new card, get a balance transfer check worth $3,000 from your new card made payable to yourself, and deposit it into your bank account. Once the money has cleared, you can pay off your debt to the store free-and-clear while paying off your balance transfer check debt on your new card in installments that don’t accrue interest for however long your introductory period lasts.
Of course there are positives and negatives that come with using a balance transfer check. For starters, not every company will even offer this option, and you’ll need to be sure to read through all the terms and conditions before deciding to use it. Sometimes these transactions take time, and most balance transfer deals come with strict deadlines in order to actually qualify for the zero interest, so you’ll need to watch out for that.
For more on the balance transfer check and whether it’s the right option for you, check out this piece.