Today, the use of checks is dwindling. However, one cannot deny that people still need it in most cases. Some institutions still require checks.
But what is a personal check?
A personal check is a simple paper slip people process coming from your checking account. The financial institution where you opened your checking account will provide you with the checks. It is essential to have a guide to fill out a check so you won’t make a mistake. After all, this is where you will write the person or company who receive the money and the amount of money you are sending.
The checks work as a promise that the money is there when your recipient goes to redeem it. It can be days, hours or even weeks later.
Compared to cards, checks are somewhat similar to slow-motion debit cards. From today’s perspective, they may seem like they are out of date. But this doesn’t mean that you should put these in the trash can. Occasionally, you might have to write a check. Doing so also has its advantages and disadvantages.
When do you need a personal check?
Some transactions will require you to use checks which is why personal checks are still needed this 2019. Landlords sometimes will ask you to pay rent using checks. Other small businesses won’t accept debit or credit cards. If you want to be more disciplined with your spending, going all out cash or using checks might be a better choice.
Here are a few instances where checks save you money, provide convenience and protect your finances.
You can pay during utility outages
Most stores rely on electronic devices to process your credit and debit card transactions. If there’s an area-wide power outage, you can only use either cash or checks to make a purchase. Since almost every one of the ATMs in your town is most probably out of service, having a paper check might be your only way to buy grocery and supplies.
Some businesses charge extra fees for credit card payments
Government agencies and utility companies accept debit and credit cards using third-party processors. However, these usually charge a fee every time you use your card to pay.
Some businesses prefer money orders or paper checks
Yes, there exist firms who don’t accept debit and credit card payments. These include some government offices, insurance companies and agents, organizations who receive donations or charge dues, and tradespeople. There are also old-fashioned retail business owners who don’t like plastic and will happily take your check.
Some retail shops enforce a minimum credit card purchase
Whenever customers pay using a credit card, banks and credit card processors charge businesses a fee. These fees aren’t beneficial especially when it comes to small purchases, as such, companies have set a minimum amount for all credit card purchases. If you have no other form of payment, you might waste your money by purchasing an item that you do not need to meet the minimum amount. When it comes to checks, there’s no required minimum purchase fee.
Checks can be traced
If you value traceability and the payee does not accept credit or debit cards, paper checks are great at providing you with traceability that you usually can not get from cashier’s checks, money orders, cash or automatic bill pay systems. Whenever you mail your paper check, you can easily choose your mail service type which includes a tracking method. Taxes and insurance premiums are some examples where documenting the mailing date of your payment is essential. By the time your check clears, you will get access to your canceled checks copy. When it comes to payment disputes, you can show your mailing receipt and provide the creditor or business a copy of the canceled check.
For giving gifts
When you’ve run out of ideas, you can gift someone with a check. They can easily deposit this check into their accounts and spend it wherever they want. Compared to gift cards, checks are not restricted to a single merchant.
Alternatives
There are alternatives to personal checks. Writing checks is not the only option you have. Here are some.
- Take advantage of your credit union or bank’s online bill pay feature when it comes to recurring payments.
- Send money electronically. You can use services such as Zelle and Venmo.
- Lastly, you can use a prepaid, credit or debit card.
Advantages of personal checks
Old-school security
In times when your purse or wallet gets stolen or lost, you can say goodbye to your cash. However, when it comes to checks, merchants and banks require a signature. Cashiers, on the other hand, always check the customer’s ID to check if the signature is legitimate. This way, when someone steals your check, you can be sure that no one can use that aside from you. Your money is safe with it.
Avoid convenience fees
We all hate fees. With personal checks, you avoid all of the convenience fees charged by property managers and businesses for most electronic payments. When you use a personal check, this is oftentimes free.
Offline option
Did you know that around 11% of adults in the United States do not use the internet? For these customers, using checks to pay bills is way more comfortable than using cash to pay in person.
Disadvantages of personal checks
Longer processing time
Compared to debit, credit, cash and smartphone transactions, personal checks take a long time to process. Aside from that, you can quickly check your accounts after you paying for your purchase to see how much money is left. But with checks, payments won’t be posted on your account until the recipient will cash the check.
If you ever do miscalculate or forget to log a payment, you might overdraw your account which is a bit a pain when it happens to you.
Checks cost money
Yes, you can avoid fees when you pay with checks, but you might still have to pay for the actual checks. Be prepared to shell out some money every month for stamps and envelopes.
