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Be Careful with Balance Transfer Checks

A few months ago, a visitor wrote to Smart Balance Transfers to tell us that a balance transfer check she received in the mail bounced when she tried to use it.  I had hoped this was an isolated issue, but a second visitor wrote in yesterday with a new balance transfer check horror story.   Here’s what Rob had to say:

“I received some balance transfer checks from one of my Chase credit card accounts. I used the check to make a payment of $25,000k to my Bank of America credit card, to get a lower interest rate with Chase. When BOA went to cash the check to cover my payment, Chase DENIED the check. So I got hit with a $40 check returned fee. But to top that off, BOA bumped my entire balance to 19.9% instead of 10.9%. BOA said when I made the payment that my balance was cleared, but when the check was returned, they had to put the balance back on my card under “cash advance” now at 19.9%. They said this is “standard practice with all banks”. So I got screwed by Chase AND BOA. I have used those balance transfer offers many times in the past. Didn’t realize that they could decline payment on them. Guess I learned a valuable lesson.”

Now, as in the first case, the offending bank was Chase.  And, in this case, BOA was “kind” by only increasing the interest rate to 19.9% instead of the standard default rate of 29.99% (Who would have thought only doubling an interest rate would be considered kind, but it actually is?)  Now, balance transfer checks don’t show up in the mail as often as they used to.  However, they are starting to make a comeback.  Unfortunately, they should not be trusted.

In the fine print of those checks, most banks state that they have the right to refuse any balance transfer or cash advance check.  This was clearly the case here, as the bank probably didn’t want to take on a large 0% balance.  However other factors, like credit limit decreases, can also cause a check to bounce.  In a nutshell, there is a small, but definite chance that any balance transfer check could be declined for any reason at any time.  And this can prove very, very costly for consumers.  Rob, whose story was the inspiration for this article, will pay over $2000 in penalty interest this year just for trying to use a check delivered to him by his credit card company.  If BOA was more aggressive, they could have charged him $4000.  Most other banks would have.

The only way to avoid the issues encountered by Rob is to shred balance transfer checks.  If you stand to save money with a balance transfer, apply for a new credit card online and transfer balances.  The new credit card company will honor the balance transfer request or deny it.  But getting denied when you apply for a new card will not cause your rate to double or triple as a bounced balance transfer check will.  In fact, there is no risk when you apply for a balance transfer credit card.  And even though these bouncing balance transfer check incidents may be rare, they still pose a threat to your financial well being.  That is a risk that is not worth taking.

For more information on balance transfer credit cards and to apply online, please see the credit card application section of this website.

Editor's Note: This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Citi or any of the other companies whose products are featured in this content.

About the author

Jeff Weber

Jeffrey Weber has been following and blogging about the credit card industry since 2004. He has also written for Forbes and been cited in a wide range of major media outlets including USA Today, Time, MSN Money, The Christian Science Monitor, The Detroit Free Press and numerous other prestigious online and print publications.

Jeffrey resides in Easton, Connecticut and enjoys spending his free time chasing after his two year old son, watching films with his wife and occasionally taking a holiday to go snorkeling.

– has written 338 posts.

{ 9 comments… read them below or add one }

Mike September 1, 2011 at 7:49 pm

To solve this problem, why not deposit the check into your checking account. Then if it bounces the most you loose is 40 dollars. Then once the check clears, write another check to the credit card company.


Jeff Weber Balance Transfers Helper September 2, 2011 at 2:49 pm


That’s actually pretty dangerous. Putting the check into a bank account could cause it to be qualified as a cash advance and that is assuming the bank is able to accept it. However, if a balance transfer check is used this way, the interest rate after the intro rate expires will be at least 20% and likely 29.99%.


Carolyn July 12, 2011 at 1:22 pm

You’re probably right about the collusion. GE Money Bank most likely thought the check would not go through if it was held up past the “Good Through” date. After all, most consumers are doing all possible to pay off credit balances and the credit card companies are doing all possible to keep it from happening.
Thanks for your insight.


Jeff Weber Balance Transfers Helper July 14, 2011 at 9:06 am

No problem Carolyn. I hope you decide to move your money away from them because sending a check that is valid and then cashing it late is an abhorrent act and brutally unfair.


Carolyn July 7, 2011 at 1:27 pm

I used a Master Card check promoted as a 2% for the life of the balance but GE Money Bank (Lowe’s consumer account) held up the check for a month. The check clearly stated “Good Through April 30, 2011. Toward the end of May, I received a letter from GE Money Bank stating they had “an inadvertent system error” and would be back dating the payment to April 25th. Of course, Master Card reflected May 20th so I am being charged 16.75% variable. Since GE Money Bank had the most to loose, I believe there was collusion between the two and GE money Bank was paid a kick-back by Master Card for delaying the check. I am fighting it but we all know they do what they want to do and threaten us with the dreaded Credit Bureaus. I’m really tired of one-sided honesty in business transactions.


Jeff Weber Balance Transfers Helper July 10, 2011 at 11:28 am

Uggh. What a mess. I don’t think there was collusion (MasterCard is just the processor, not a party to the transaction), but I’ve yet to hear anything positive about GE Money Bank in over seven years! I would keep fighting, but be careful and avoid not paying, as the credit score damage is not worth it.


Jason June 10, 2011 at 11:55 am

As long as you read the fine print and understand the rules, you should not have a problem. With all the bank’s issues within the last 24 months, a lot of them are sister companies now and you can not do a balance transfer offer within the same banks or related banks… the best bet is to deposit the checks in your bank account and spend the money as needed


Jeff Weber Balance Transfers Helper June 13, 2011 at 11:11 am


You can avoid a lot of issues by reading the fine print, but you can also run into trouble with things that aren’t directly addressed.

For example, many credit card companies don’t explicitly state depositing the checks counts as a cash advance, but they often do and thus come with rates that can be as high as 29.99% on top of 4-5% fees.

Also, another reason I have strongly argued against using credit card checks is based on stories I have been told by site visitors who wrote out checks and had them denied by their credit card companies, even though they had enough credit.

Thus, as someone with seven years experience in the credit card world, I always tell visitors who submit comments or email me to handle all balance transfers over the phone just to be careful and make sure things go correctly.


Julie Danielsob January 21, 2011 at 7:24 pm

same thing happened to me I wrotea transfere check for 500 and It bounced I had wrote one earlier in the yr for 5000 and it sailed right thougno problrmds All credit cards are a crooked as a snake to bad a few more customers don’t file bankrupcy and break ther asses!!


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