I left off YESTERDAY with a little information about people sending you checks that all you need to do is sign to ‘reap the benefits’ of whatever they want you to do. I thought this deserved more of a discussion.

When you are sent a check from some companies for money you never asked for, this is usually a sneaky way to get you to sign up for a loan. You have probably guessed that the interest rate on this loan is going to be way higher than anything you want to pay. I get these periodically from a credit union I belong to. The amount ranges from $2,000.00 to 10,000.00, and the teeny tiny paragraph on the back of the check tells me that I’m going to be paying for 12-24 months. I almost took advantage of these loans one time, but I was working for another credit union at the time, and my people explained how I would be better off getting money in some other fashion.

Another place that originates these kinds of checks is the tax preparer that many of your parents probably go to. You will probably wind up going to the same place. When they give you your “instant refund”, what you are actually getting is a loan on what you are assuming your refund to be. When your ACTUAL refund comes in, they take it and apply it to the proceeds of your loan. In many cases this is transparent to you, but you have to pay a fee for this type of service. Let me say that a different way: Not only are you paying somebody to do something that isn’t really that hard (while you are in the early stages of your career, anyways), you are also paying a fee to get the money that is yours by right.

The other type of check you will get a lot of are small checks that, by signing, you will enroll in some sort of service. I’ve already mentioned the credit monitoring service, but there are other types of services that you can get roped into.

Credit card cash advance: Every month, I get a supply of credit card “convenience” checks. The first one is written out payable to me. If I just deposit the check, I can use my available credit line to pay a bill. What they don’t tell you is there is–

What this means to you is that you will pay interest from the day your check clears. There is no trying to get out of paying finance charges.

I’ve also seen these types of checks used for insurance or some other service that I just don’t want.

As for getting rid of these checks, the reason I’m so paranoid about them is because they are negotiable checks. I don’t want some yahoo to go dumpster diving and get a check payable to me. If they cash it, sure I’ll get my money back but it’s a hassle in the mean time.

I personally, would tear them in several pieces, and throw them away at different times, shred them in different machines, or burn the whole thing. You guys should appreciate the legitimate opportunity to light something on fire.

I hope this clarifies my previous post a little, and I would like to hear what y’all think.

  1. When you get those supply of credit card “convenience” checks shred them immediately!

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