Bounced Checks Unnecessary With Modern Banking
Have you ever thought about all the inconsistencies that occur in the modern
banking industry? With all the computers and digital banking and everything
else, why can't a bank instantly account for money you put in or money you take
out?
If you make a deposit at the ATM, you still have to wait a day for the
deposits to become available. Why? It's all digital, just uplink and calculate.
And why does it take the same amount of time for an online bill payment to clear
your account as for a check?
I can't tell you how many times this causes a
bounced check to occur, because people write checks or make payments based on
money they expect to be transferred to the account but for some mysterious
reason has not arrived yet.
Even if you transfer money online from your PayPal account, depending on your
bank it can take three or four days for the transfer to clear. Ridiculous. Your
bank knows PayPal has the dough, so why can't they instantly make it available?
Yet if you use PayPal to make a payment using your credit card or bank account
the money instantly is subtracted from your account. You can see how a bounced
check is likely to occur since money gets withdrawn from the account faster than
it is deposited.
Then the bank charges you $25 to $35 per check in penalty fees for bouncing
that check, even though it's really the bank's fault anyway and that escalates
into more bounced checks and fees because you've likely written checks on the
money the bank took out for fees.
What's really going on is that the bank likes to sit on your money and earn
interest on it while it's hanging out there in limbo. They also know how many of
us are writing checks on money that was deposited that same day, so they
purposely create a void of time that causes checks to bounce and makes more
money for the bank.
If you have enough money that you don't have to write checks on money you
deposit the same day, you won't bounce so many checks. But if that's not your
situation, then you need some ways to avoid bounced checks and overdraft fees or
get protection against bounced check problems.
The Federal Reserve suggests that you can avoid bounced check issues by being
extremely aware of how your account works. First, they say, pay close attention
to all your transactions, especially electronic ones, and record the amounts of
any checks you write. Also record withdrawal fees and purchases.
Then, remember to write in any automatic payments that are made from your
account, such as paying utilities with an online payment system, and remember
that some amounts for automatic payments haven't been subtracted yet.
A good financial practiced recommended by the Federal Reserve and other
advisors is to get overdraft protection against bounced checks. Most of these
overdraft protection plans take money from your savings account or credit card
in order to cover a bounced check and fees associated with it.
This keeps you from racking up hundreds of dollars in fees because one
bounced check turned into a chain of bounced checks because of the fees.
Remember, though, that these systems will cost you something-just not as much as
a bounced check.
banking industry? With all the computers and digital banking and everything
else, why can't a bank instantly account for money you put in or money you take
out?
If you make a deposit at the ATM, you still have to wait a day for the
deposits to become available. Why? It's all digital, just uplink and calculate.
And why does it take the same amount of time for an online bill payment to clear
your account as for a check?
I can't tell you how many times this causes a
bounced check to occur, because people write checks or make payments based on
money they expect to be transferred to the account but for some mysterious
reason has not arrived yet.
Even if you transfer money online from your PayPal account, depending on your
bank it can take three or four days for the transfer to clear. Ridiculous. Your
bank knows PayPal has the dough, so why can't they instantly make it available?
Yet if you use PayPal to make a payment using your credit card or bank account
the money instantly is subtracted from your account. You can see how a bounced
check is likely to occur since money gets withdrawn from the account faster than
it is deposited.
Then the bank charges you $25 to $35 per check in penalty fees for bouncing
that check, even though it's really the bank's fault anyway and that escalates
into more bounced checks and fees because you've likely written checks on the
money the bank took out for fees.
What's really going on is that the bank likes to sit on your money and earn
interest on it while it's hanging out there in limbo. They also know how many of
us are writing checks on money that was deposited that same day, so they
purposely create a void of time that causes checks to bounce and makes more
money for the bank.
If you have enough money that you don't have to write checks on money you
deposit the same day, you won't bounce so many checks. But if that's not your
situation, then you need some ways to avoid bounced checks and overdraft fees or
get protection against bounced check problems.
The Federal Reserve suggests that you can avoid bounced check issues by being
extremely aware of how your account works. First, they say, pay close attention
to all your transactions, especially electronic ones, and record the amounts of
any checks you write. Also record withdrawal fees and purchases.
Then, remember to write in any automatic payments that are made from your
account, such as paying utilities with an online payment system, and remember
that some amounts for automatic payments haven't been subtracted yet.
A good financial practiced recommended by the Federal Reserve and other
advisors is to get overdraft protection against bounced checks. Most of these
overdraft protection plans take money from your savings account or credit card
in order to cover a bounced check and fees associated with it.
This keeps you from racking up hundreds of dollars in fees because one
bounced check turned into a chain of bounced checks because of the fees.
Remember, though, that these systems will cost you something-just not as much as
a bounced check.