12 Reasons to Keep Using Checks

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You may believe writing checks is a thing of the past. Some day they most likely will go away completely – they already are in some European countries. Even in America, a lot of retail and B2B establishments use POP , ARC or ACH transactions today to electronically process your check. Use of online bill paying, electronic wallets and debit cards can be so convenient that you wonder why you would ever want to write another check. Writing a check takes time, buying checks costs money. Mailing checks to pay bills costs postage. Why bother?

Here are 12 reasons to use checks instead of the alternative.

1) You have a record of your expenditure.

Most checks now have a carbon, as you write the check you are making a copy of it. Most folks who use checks also write the check payee, date, check number and amount in the check register. Using a debit or credit card may not result in as consistent a record.

You also have (or can get) a paper copy of your check for proof of payment (just in case the IRS comes calling).

2) You tend to be more aware of available funds.

Since you are keeping a record of what you are spending, you tend to know more about how much is left in your account.

3) You don’t have a transaction  processing fee.

On most checking accounts you won’t have any kind of transaction fee (unless you have an account where you can only do so many transactions each month), whereas your debit card can generate a fee for you if you aren’t in network.

4) You tend to spend less.

If you have to go to the trouble of writing out a check and recording what you spent and subtracting that amount from your balance, you may be able to keep better track of your spending than if you just swipe your debit card and forget about the transaction until you get your statement or check your balance.

5) You control the timing of money coming out of your checking account.

With automatic bill pay, once you set the date, you are locked into it. If you have some other major expense that month and need to postpone the bill payment, it is more difficult.

6) The business or person you are paying won’t have a transaction fee.

Financial institutions don’t (yet) charge the retailer to process checks. With both credit and debit transactions, the person you pay is charged a fee – which is passed along to all of us in the form of higher prices.

7) You don’t need electricity or the internet to pay your bill.

You don’t need to sign onto a computer to set up bill pay and you don’t need to get on the internet to check your balance on the bank site.

8.) You don’t have so many entanglements with your bank when you want to switch.

Authorizing automatic bill payment makes it harder to close your account as you have to make sure that all the dust has settled and all bills are paid somehow before closing it.

9) You have fewer chances for overdraft fees if you use checks.

Use of debit cards can cause your account to be overdrawn, depending on whether you use your PIN or not. According to Justin Pritchard in the About article Debit or Credit? Who Pays Interchange Fees?

“If you’ve ever paid for gas at the pump, you know that you swipe your card before pumping gas. The machine doesn’t know how much gas you are going to buy. As a result, it has to take a wild guess. It checks to see if you have at least $50 or $100 available in your account – in other words it authorizes a purchase. If authorization comes back, the retailer “blocks off” that $50 or $100 so you can’t spend it elsewhere.

You might only by $10 worth of gas. Nevertheless, $100 will be blocked off for several days. In a worst case scenario, you’ll end up bouncing checks even though you have the money – it’s just “not available”. This means that if you use your debit card for everyday purchases, you need to be careful. Two ways to protect yourself are:

  • Keep extra cash in your checking account
  • Use your PIN if you don’t have extra cash in your checking account

Note that using your PIN will make the transaction clear your account more quickly. However, there is a security issue. By entering your PIN number, you run the risk that somebody else will discover it. Thieves (or a hidden camera) may see which numbers you hit on the keypad, or the retailer’s device could give up your PIN – whether on purpose or by accident.

If your PIN is compromised, scammers have direct access to your checking account. This is pretty scary! They can spend that money, or they may even create a fake ATM card to make withdrawals. If they drain your checking account, you won’t be able to pay important bills. Your account may be protected from fraud, but you’ll have to go through some harrowing days or weeks without any money while the issue is resolved.”

10) Some places do not accept debit or credit cards.

My  kids were very surprised when we all went out to eat and the restaurant took neither credit nor debit cards.   Unless you want to carry large amounts of cash, you may not be able to grab that great bargain at the garage sale.

11) Use of checks is safer and more convenient than using cash.

Although cash is KING, untraceable, and cheap to use and at times can keep you from spending money (it is psychologically harder to spend cash than to use checks, credit or debit!), carrying around a bunch of cash is not too safe. In addition, going to the bank or ATM to draw out the cash is often not convenient.

12) Using checks is a comfortable payment method for many.

Elders (and the rest of us too!) may have trouble understanding the ins and outs of using debit or electronic payments. Many are surprised to discover fees they weren’t expecting. Many have issues trying to remember and record what was spent. Many lose the darn cards and then can’t get to their money. Laws around fees and protection in using debit cards seem to change with frequency.

I still use checks for everyday bill paying – utilities, the weekly trip to the grocery, paying off the credit card and etc.  I use credit for payment when travelling, reserving hotels, paying for online purchases or for other purchases when I want more protection than paying cash gives.  So far, I have little use for debit cards!

How do you use checks? And how often?

This post has been written by Marie from FamilyMoneyValues.com. Be sure to visit her site if you’ve enjoyed this post.

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

19 Comments

  1. For awhile, using checks was considered a no-no. Many places would give you a hard time when you went to write one. But with technology allowing you to take a picture of the check to deposit it, it seems as though the bad stigma with checks has eased.
    Jon @ MoneySmartGuides recently posted..Announcing My eBook Giveaway

    • Hmmm, your experience is different than mine. I’ve never had a problem using checks locally. I used to have problems when I was out of town – as a lot of Mom and Pop shops wouldn’t accept local checks years ago, but that has changed now that the banks are more national.

      I never saw a ‘bad stigma’ with checks.
      Marie at Family Money Values recently posted..When is the Cost of a Conference or Seminar Worth the Price?

  2. I agree with #8. Our bank has made some annoying changes over the past few months and we would like to switch to a different bank but it is a hassle having to change all the automatic payments we have set up. I mainly use checks to pay monthly rent and pay my parents 3 months ahead of time for our phone bill.
    Jessica @ Budget for Health recently posted..Spicy Red Lentil Soup

  3. Owning a business that accepts checks, I see it both ways. Checks don’t have any sort of fee associated with them, but we still get people who bounce checks. It’s a pain to collect. I’ve even had people write a huge check, it bounces, and then we get a letter that the filed for bankruptcy and we aren’t able to collect. There will always be dishonest people. Yes, some banks offer scanners where you can auto deposit checks right away, but we live in a small town and our bank does not. Maybe someday. We can’t not take them because we do have lots of older patients who don’t use credit cards. For my personal use, I only write checks for things that won’t take credit cards. I like my rewards points too much:)
    Kim@Eyesonthedollar recently posted..6 Money Tips for College Graduates

  4. I am not a fan of checks and only keep them around when someone doesn’t take them. As Kim said, when I ran my business I would always get checks that bounced or took a long time to clear. Checks are going away slowly because of our demand for “now”. While I think they can be good here and there, it is always a pain to use them around my area. Retailers hate them and usually scoff when you pull one out.

  5. Just to point out a few things, even though my wife and I have switched back to cash only for a few things, most of our transactions are done electronically. That’s to say I don’t disagree, but the counter-points below are just my thoughts.
    I’ve never had a problem trying to use a check in over 30 years, but perhaps that’s just part of my luck. 🙂

    #1: I can’t agree with, since I download the transactions from our debit cards just as easily as our credit cards and checks. I have to categorize them sometimes, but most of the time Quicken does it for me automatically with little or no thought. I sometimes update the “Memo” field in my register to reflect what I actually purchase (i.e. clothing, etc.).
    #3: I don’t pay a transaction processing fee (granted the vendor does, but that must be averaged over everyone that will purchase the item/items)
    #7: Once I’ve set up auto-payment of a bill (most of mine are that way), I only need electricity and a computer (or my phone) to see that the transactions happened.
    Chris recently posted..How to use Finance101 CAGR calculator

      • I generally agree with your statements in the article, it’s just that I’ve long since gotten over any psychological value of having a hard copy of almost anything.
        That’s coming from someone who at one point in time had pay stubs from 30 years ago when I first started working. LOL

        Heck, for the past 6-7 years I haven’t even printed out my taxes since I file them electronically, I simply export them to a PDF and file that away for safe keeping.
        Chris recently posted..How to use Finance101 CAGR calculator

  6. Great points! Absolutely true, especially about the psychological value of a hard-copy check; so easy to not think in terms of money when not dealing with something in hard-copy.

  7. I use checks for my assessments on my condo so that I have a paper copy.
    I get cashier’s checks for my Chicago property taxes because I do NOT trust the government. My grandmother died and my family sold the house. However, they would still get a property tax bill for Chicago. My family would call and write letters that the house was sold, etc. As a result, I keep a copy of my check for my Chicago taxes as I don’t trust them.
    I also always used a check for my landlord to have a paper trail.
    Barb recently posted..I LOVE ELOQUII


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