Why Do Personal Checks Still Exist?
Personal checks are gradually becoming obsolete . They are like fax machines – outdated, slow, only a group of hardened people still use them, even when they become less practical. Is there a good reason to still use paper checks? In some cases, yes, although you still need to be careful about identity theft.
What is a personal check?
Unlike the glowing rectangles of phones or the displays of debit terminals that we usually use for purchases, checks are rectangles of paper and take a long time to process in the mail – usually after a few days or weeks. During this time, you will need to make sure funds are available until the check clears, otherwise the check will bounce and you will receive a commission – about $ 35 on average . To make matters worse, if you want to use checks, you often have to pay for them – up to 30 cents per check , depending on your bank (although some offer them for free).
However, even with all these negatives, there are times when you have no choice but to use personal checks, or when using them can save you money.
When can I use a personal check at all?
As many renters can attest, not all businesses or organizations accept credit or debit cards, especially for larger purchases. This is because some businesses have low margins and want to avoid transaction costs, or they are large organizations like utilities or government agencies that are slow to accept plastic. And when they accept debit or credit, it’s often handled by third-party payment processing companies that charge a fee every time you use them, making checks a more practical option if you’re looking to save money.
Another overlooked reason people use checks is that 10% of US adults do not use the Internet . This makes it easier to pay bills by check than it is to pay in person in cash. And some people just prefer the traceability of checks, as you can access a voided check through your bank after it has been verified, making it easier to resolve a dispute with a lender or business later.
If you’ve ever received a check from your grandmother enclosed in a greeting card, you know that checks are also the preferred way to send someone a cash gift.
Are personal checks safe?
Not really. The problem with checks is that they contain your banking information (and sometimes your address) and they are processed by many different people before they are actually cashed, making them a target for identity thieves. In fact, one of the reasons debit and credit cards have become more widespread is because they were considered a safer method of making purchases.
If you are using checks, avoid adding additional personal information in the check note field (such as your date of birth, phone number, or driver’s license number), and if you can avoid printing checks with your address, do so. You will also want to keep your checkbook somewhere safe and secure, ideally in a locked drawer at home.