Today, I’m pleased to share a guest post from Gary Dek. Gary Dek is a contributor to Gajizmo.com and is always looking for ways to make and invest money. Gary previously worked for an internet company on their M&A team, as well as investment banking and private equity firms in California.

If you have a credit card that allows cash advances, you have probably received credit card convenience checks and just don’t know what they are. Many credit card companies send these checks to their customers on a regular basis. Interestingly enough, I have an account with Discover Card and they send these checks on a monthly basis, despite the fact that I’ve never maintained a balance on any of my cards or even like using checks. While convenience checks can be used for any purpose and look exactly like normal checks, you should be aware of how they differ from bank checks before deciding to use them to pay bills.

How Do They Work?

Convenience checks look and work just like regular bank checks or drafts, but instead of drawing on money already in your checking account, convenience checks are treated like a cash advance on your credit card. The checks have expiration dates but within the time stated on the check, they are valid up to the available credit limit on your card.

However, unlike bank checks which are often issued with free checking accounts, convenience checks have fees. The interest rate on credit card cash advances may be as high as 29.99%, even if the rate of interest for purchases on your card is normally only 12.99%. The interest on cash advances begins to accrue the moment the money is borrowed, so interest charges apply even if you pay the full amount when the credit card bill becomes due. The standard transaction fee for cash advances is about 4% in addition to the interest charged by the credit card company.

Honestly, I did not know that last part, but when these offers come from a credit card company, you should just assume there is a catch. Thankfully, I’ve never needed to use them and finally decided to research it.

Why Use Convenience Checks?

The advantages of convenience checks are they can be used for balance transfers from one credit card to another. Low introductory rates on some credit cards allow consumers to save on interest payments on balance transfers for between 6 and 18 months. Furthermore, there is a balance transfer fee of 3% in addition to the fees associated with the convenience check. When deciding to transfer credit card balances, it is smart to consider all the associated fees to determine if transferring your balance will save money or not.

Additionally, some vendors do not accept credit cards. While this problem is increasingly rare in our global economy, it does happen sometimes. If a vendor does not accept a credit card and you do not have access to bank checks or wire transfer, you can usually pay with a convenience check. Obviously this can be an expensive alternative to purchasing items on your credit card or paying in cash.

It is also important to keep in mind that credit card companies apply payments to the balance with the lowest interest rate first, so if you normally carry a monthly balance on your credit card, you could be paying for the convenience check, at the higher interest rate, for months.

Disadvantages of Convenience Checks

Interest Payments. Convenience checks have the highest interest rates the credit company charges, even if you have excellent credit. If you cannot pay off the convenience check right away, the interest on the check may cost more than the initial purchase.

Fees. In addition to extremely high interest rates, fees can be as much as 4% of the total amount borrowed. If your advance is for a small amount, the company may even have a minimum fee which is greater than 4% of the total amount of your check.

Credit Score. Since convenience checks are loans, they increase your debt to income ratio and may have a negative impact on your credit score. Not only that, while bank checks allow you the option to protect yourself from overdraft fees, going over your limit with a convenience check means you will be charged a penalty plus fees for the returned check. Using convenience checks raises your credit card debt, which should not exceed approximately 50% of your credit limit or this can lower your credit score.

No Protection. The purchase protection plan that your credit card offers on items bought with the card do not apply when the items are purchased with a convenience check. The check is considered the same as cash, even though it is issued against your account by the credit card company. Cash advances do not fall under the Fair Billing Credit Act and companies do not have to offer the same guarantees that are offered on credit purchases.

Identity Theft. In today’s world, identity theft is a real threat and using convenience checks can increase the risk of someone stealing your credit card information. If you do not plan to use convenience checks, contact the credit card company and ask them not to send the checks in the mail. Never leave checks out and if you lose them, report the loss to the credit card company immediately.

Bank Checks Are A Better Deal

Using a bank check when credit cards are not accepted by a vendor is financially more responsible than using a convenience check. In most cases, if you do not have the money for the purchase in your bank account, you should not spend it. Checking accounts usually allow customers to apply for overdraft protection, which saves on fees and returned checks if you accidentally spend more than you have on deposit. This avoids the penalties and embarrassment of a returned check for exceeding your credit limit. Unless an expense is an emergency and you do not have the money to cover the cost, a personal loan is a better and cheaper way to pay for necessary items that you cannot afford immediately.

If there is no time to apply for a bank loan, check with family or friends to see if they can give you an immediate, temporary loan before resorting to a convenience check. You might also consider asking your employer for a cash advance. If being short on cash is a regular occurrence and you’ve done everything you can to stop overspending, then it may be time to explore ways to make money from home and create a side income.

While credit card convenience checks may have some advantages, consumers should be aware of all the pitfalls of relying on these disguised cash advances before opting to use the checks. It is smarter to use your credit card for purchases or your bank checks whenever possible to avoid falling into a serious credit trap. If you thought credit card debt was a nightmare, don’t experience worse with convenience checks.

Over the weekend, in addition to watching the Super Bowl, I made my very first apple pie with lattice topping. Yum! It made me think of how [...]]]> Did you watch the Super Bowl last night? Great game! Though I have to say, that Go Daddy commercial was kind of… weird. And Beyonce was just awesome.

Over the weekend, in addition to watching the Super Bowl, I made my very first apple pie with lattice topping. Yum! It made me think of how football is such an American thing to do – especially a tradition like the Super Bowl where we’re all glued to the TV, whether it’s to watch the game, the commercials or the halftime show – and so is apple pie!

My pie turned out pretty well if you can go by the fact that my husband and son gobbled it right up. I only had red delicious apples and while I know you’re not supposed to use them in pies, it still turned out good. Here’s how I did it:

Mix the dough (recipe below) and stick it in the freezer for two to four hours. Meanwhile, peel and slice 4-6 apples

Toss the apples with lemon juice, sugar, brown sugar, flour, cinnamon and nutmeg.

Roll out one half of the dough to 1/4 inch thickness and press it into a pie plate. Roll out the other half of dough for the lattice topping. Cut into 1/2-1 inch strips.

Fill the pie crust with the apple filling.

Weave strips into a lattice pattern. Top with egg yolk and milk. Bake at 425 F for 15 minutes,  then reduce heat to 350 F and bake 40-45 minutes, until crust is golden and filling is bubbly.

Apple Pie

Ingredients: (Yield: one 9″ pie)
Pie Filling
8 cups peeled and thinly sliced red delicious apples (about 4-6 apples)
2 tbsp. lemon juice
1/2 cup sugar
1/4 cup brown sugar
1/4 cup all-purpose flour
1 tsp. ground cinnamon
1/4 tsp. ground nutmeg
2 tbsp. butter
1 egg yolk
1 tbsp. milk

Pie Crust

2 1/2 cup all-purpose flours
1/2 tsp. salt
1 c. butter, diced
1/2 cup ice water

Directions:

Pie Crust
1) Whisk together flour and salt in a large bowl. Cut in the butter until the mixture resembles coarse crumbs.
2) Stir in the ice water slowly. Stir until you have a uniform dough, but don’t over mix it. Wrap in plastic wrap and refrigerate for 2-4 hours.
3) Divide the dough in half and roll out one half on a floured surface. Roll out to about 1/4 inch thick. Gently press into into the pie plate and trim excess from the edges. Add filling (see below).
4) Roll out the other half. Use a sharp knife cut into strips about 1/2 inch wide. Weave the strips in a lattice pattern.
5) In a small bowl, beat the egg yolk and milk. Brush mixture over top crust.
6)  Bake at 425 F for 15 minutes,  then reduce heat to 350 F and bake 40-45 minutes, until crust is golden and filling is bubbly.

Pie Filling
1)  In a large bowl, mix the sliced apples with lemon juice, sugar, brown sugar, flour, cinnamon and nutmeg.
2) Fill pie crust with filling.

What is your favorite apple pie recipe? Are you a fan of lattice topping or brown sugar crumbs? (I like both!)

What Jim does is try to save you money on the bigger purchases in life – like cars, home repair, wedding expenses, or [...]]]> Have you ever dealt with a personal negotiator? I hadn’t – until I was recently contacted by Jim Herst, a personal negotiator with over 50 years of experience in the business.

What Jim does is try to save you money on the bigger purchases in life – like cars, home repair, wedding expenses, or reoccurring bills (like cable and telephone). We often feel locked into the prices we are offered, but that’s not always the case. Many of these companies are willing to negotiate and lower their prices in order to make a sale or keep a current customer. These companies want to win and keep customers just as much as you want to save money.

The problem starts when it comes to approaching these companies. It can be hard approaching them, not knowing what to ask  in order to get yourself the best possible deal. That’s where Jim comes in. He negotiates with the companies in order to save you the most money. He has 50 years experience negotiating for small-business clients and individuals, so he knows how to broker the best deal. Even better, Jim’s service is risk-free – meaning you pay him nothing in advance. His fee is a small percentage of the savings he obtains for you if you opt to take that savings.

When Jim approached me to review his service for this blog, I decided to give his service a try. I’m not looking to make any major purchases in the near future, so I decided to see what he could do for my cable/internet/phone bill. Jim worked tirelessly on my behalf, but as it turns out, I already have the best deal (go figure). Although I personally didn’t see any savings (and that’s probably because Comcast likes to be difficult), I feel confident that Jim offers quality service that can save you big bucks – especially on big purchases like cars, boats, and home repairs.

If you are making a big purchase or just want to save on your monthly bills, I definitely recommend checking out Jim’s site. Since it’s risk-free, it’s definitely worth a shot!

I was not compensated for this review and all opinions are 100% mine.

(Source)

I feel like every personal finance/frugal living is talking about Black Friday, so I wanted to jump on the band wagon. It’s just four days away, so you probably already have your plans set. But I wanted to share mine.

It’s all about online, folks.

First though, let’s back up [...]]]>

(Source)

I feel like every personal finance/frugal living is talking about Black Friday, so I wanted to jump on the band wagon. It’s just four days away, so you probably already have your plans set. But I wanted to share mine.

It’s all about online, folks.

First though, let’s back up a bit. I wanted to come on here railing Black Friday and all its assorted evils. Did you hear Target is opening their doors at 8pm Thanksgiving Day? Target is second in line at 9 pm. Which makes me wonder – what happened to Thanksgiving? You know, that holiday where you’re supposed to gather with friends and family over a wonderful meal and take the time to be thankful? Nah, forget that. We need to stand in line, out in the freezing cold, fight the crowds – all for the latest gadget (that they might not even have by the time you actually get inside the doors). People have actually died on Black Friday. Died! And now we have extended this national craziness to Thanksgiving day itself.

If you haven’t guessed, I don’t like Black Friday. It’s kind of like my theory on coupons – you’re only going to be saving on things you don’t need. Then, I started looking at some of the sales. And really? They’re not that bad. You can honestly save some serious dough on things you might end up buying anyway – toys for the kids, gadgets for the hubby, cozy slippers for your mom. I couldn’t consciously come on here and recommend staying the heck away from Black Friday when there actually are great sales out there. So, I came up with a compromise – online shopping.

Online retailers like Amazon, Target, Walmart, Best Buy and Kohl’s are offering great sales on Black Friday in addition to Cyber Monday. A lot of these stores are offering free shipping. That means you’ll not only get a great deal, but your purchase will be delivered to your doorstep for free. So just take some time to look ahead for online deals instead of fighting the crowds Thanksgiving night.

It’s the best of both worlds. By shopping online, you’ll see some really great savings (provided you only buy things you would have anyway) and you’ll miss out on the crowds. Plus, you can spend Thanksgiving exactly where you should be – with your family (or friends).

What do you think of Black Friday? Do you brace the crowds or stay at home?