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Prevent convenience check surprises this spring

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NEW YORK (3/24/10)--Consumer spending in the U.S. is expected to increase as warmer weather and the Easter holiday spring shoppers into action. Shoppers plan to spend an average of $118.60 this Easter season, a 2% increase from 2009, according to the National Retail Federation’s 2010 Easter Consumer Intentions and Actions survey. The small increase in discretionary spending is a positive sign for the economy (cnn.com March 16). While chocolate bunnies and spring sales coax a few extra dollars from wallets, be alert if you use convenience checks from your credit card issuer. These checks are indeed a useful convenience. Just be aware that they are cash advances with potential pitfalls consumers should consider (fdic.gov March 15). Here’s how to enjoy the convenience and avoid trouble:
* Understand the agreement. Know the interest rate and whether it will change after an introductory period. Also, know what transaction fees and other charges may be assessed. * Shred what you don’t use. Crooks search through trash for important documents and financial information. To prevent fraud, always shred unused convenience checks--and any valuable documents--before disposing. * Understand that different rules may apply. Use of a credit card allows you to withhold payment under certain circumstances for defective goods. Convenience checks do not provide the same protection.
For more information, read “Get Real About Credit” in the Home & Family Finance Resource Center.