What Are Balance Transfer Checks at Chase?

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You can also use balance transfer checks to pay monthly bills.
You can also use balance transfer checks to pay monthly bills. (Image: Jupiterimages/Comstock/Getty Images)

If you have a Chase credit card, you might receive a letter in the mail that includes something called "balance transfer checks." These checks look like those that you might have for your personal checking account. However, if you write out these checks to pay bills, the money will be added to the balance of your Chase credit card. This can be beneficial if you use these lower interest rate checks to pay off a credit card or other debt with a higher interest rate. You just have be careful of the details so you do not end up spending more money in interest and fees on your previously accumulated debt.

Interest Rate

When you receive the balance transfer checks from Chase, take a look at the interest rate terms associated with those checks. The interest rate will generally be low, or an attractive rate. But you also must look at the terms of that rate. For example, a Chase balance transfer check might offer you 0 percent interest on the debt for 12 months. However, at the end of the 12 months, whatever you have not paid off from the transfer might rise to the current interest rate associated with the credit card. You have to weigh if the savings over 12 months is worth a potentially higher rate down the road. In order to do this, you must compare the interest rate terms of the other debt. If your debt is currently at 30 percent, and Chase is offering 0 percent for 12 months and 15 percent thereafter, it makes sense. If Chase is offering the same deal, but your other debt is at 9.9 percent, it might not be worth moving the money depending on how long it will take you to pay off the debt.

Transaction Fee

It's important to consider the associated transaction fee for balance transfer checks. This fee is tacked onto whatever you write the check for once it has been cashed. For example, the transaction fee for a Chase balance transfer might be 5 percent. So if you transfer $5,000, then you will be charged an additional $250. This may be offset by a lower interest rate, but you must factor it into your equation when calculating if utilizing the balance transfer check from Chase is worthwhile.

Credit Limit

When using Chase balance transfer checks, you have to remember that they are only valid up to the current credit limit on your Chase credit card. Therefore, you must confirm your balance before using the checks to make sure you have enough room on the card. For example, if you just used your Chase card for a weekend getaway and charged $2,000, then that would lower your available credit by $2,000 and therefore the amount for which you can use the balance transfer checks by $2,000.

Other Purchases

While many people use their Chase balance transfer checks to consolidate higher interest rate debt, they can also be used anywhere people take a check. For example, as long as you have enough room on your Chase credit card, then you can write checks for your rent, car payment, utility bills or even to pay a monthly payment on other credit cards. Just remember that the terms of the balance transfer check, such as the interest rate and transaction fee, will be tied to that check. This means if you cut a $1,500 balance transfer check for rent, it might be subject to the transaction fee and interest rate of your Chase credit card.

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