It’s a common mishap that happens to most people at one time or another. You write a check for something, and whether the amount is large or small, you don’t have the funds in your account at the time that the check is cashed. Your check bounces, and you end up having to clean up the mess. In most cases, you are charged a fee from your bank, and sometimes from the bank that attempted to cash the check. However, according to Credit.com, there’s a lot more involved in the process.
What is Involved with Bouncing a Check
First, it’s important to determine whether the bounced check is a civil or criminal infraction. Most situations are just a civil infraction, as the majority of people will work to cover a bounced check as quickly as possible, as well as pay the necessary fees. A criminal charge may arise if a person intentionally and repeatedly bounces checks.
You will be asked to be pay a fee for bouncing the check, and the average fee is $27. This first fee is paid to your own bank, but you also may be charged an additional fee of a similar price by the bank that attempted to cash the check. One bounced check, regardless of the amount of the original check, may cost you more than $50 in fees.
You may not be worried about bouncing a check because you have overdraft protection. However, your bank may charge you a convenience fee for overdrawing your account and participating in the overdraft protection program. These programs and their associated fees can actually carry an interest rate of up to 2000 percent, so you should be wary of participating.
In general, your bounced check will not appear on your credit report, unless it is reported to a collections agency. If you have a bounced check that is reported to collections, it may have a negative impact on your total credit score.
The best way to avoid bouncing a check is to stay on top of your finances. You should always balance your checkbook in order to have an accurate idea of your available funds. You also can set up online alerts that will inform you when your checking account balance has reached a certain level. When you avoid bouncing a check, you avoid a significant expense, as well as an embarrassing hassle.
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