Bounced Check

How to Avoid the Bounced Check

Nothing spells trouble more than a bounced check. An overdraft of your bank account can be a costly mistake. Bounced check fees average more than twenty-seven dollars and can easily escalate to more than thirty dollars per presentment. There can even be some legal ramifications. A bounced check is far more likely in this day and age. Unfortunately, more and more banks are clamping down on people who write bad checks.

The sad part about the whole scenario is that most people who bounce checks do not do so intentionally. In fact, most of us avoid making this expensive mistake at all costs. However, the combination of disorganized records, a lack of effective communication and unexpected expenses have many people reaching a bounced check record.

The most significant problem is that many times there are two individuals using the same account. Add in automatic bill paying each month and online shopping and you can be well on you way to a bounced check or two or even more. This can be financially devastating for anyone who lives from paycheck to paycheck. Unfortunately, many families do live from paycheck to paycheck. One overdraft can set off a chain of events suitable for a Greek tragedy. Let’s say one person who uses the account pays the utility bill in person without knowing that the other person has already mailed a payment. This small mistake can lead to an overdraft in the account and consequently a bounced check letter and bounced check fees.

The bounced check racks up a non-sufficient funds charge from both the utility company and the bank. In a couple of days, the check is reintroduced to the account and, if the problem has not been discovered and corrected yet, fails to clear once again. This one bounced check has bounced twice, doubling the bounced check fees.

The problem lies in the simple fact that many families cannot afford to be poor. They cannot live from paycheck to paycheck without the risk of a bounced check here and there. This same group of individuals also discovers that their credit rating information is lacking strength because they are attempting to catch up with bounced check fees and past due bills.

The bad credit leads to bad credit scores which in turn leads to higher interest rates when applying for loans and lines of credit. Unfortunately, these families have little choice but to accept higher interest rates. A purchase that costs a person who has a comfortable income and good credit relatively little costs a struggling family more in the long run.

One bounced check is not going to tailspin a family into complete and utter disarray. However, it is a sign that they may want to cut down on spending. They want to keep a detailed record of their spending and most importantly, they want to communicate with one another to avoid financial trouble. Effective communication and detailed recordkeeping can help reduce the receipt of the dreaded bounced check letter and the related bounced check fees.