Bounced check

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Bounced check

Post by student » Thu Jul 12, 2018 9:08 pm

I guess I am getting senile. My check bounced. I have two checking accounts that I use. The main one that I use to pay tax and a secondary one that I use to pay monthly association fees and to small merchants. For security, I keep a very small balance on the secondary checking account. When I paid my property tax last week, I used the wrong check. Instead of the one from the main account, I used the one from the secondary account. So the check bounced. I found out via an email from the bank today. I called the property tax office and offered to bring in a new check this afternoon. The lady said the original check has not been returned to them yet. She took my phone number and said she will call me when the check is returned, then I can go in with a certified check and $25 fee. The deadline is in September. So I am not delinquent. My concern is whether this will affect my credit. How come I minimize the effect? Thanks for any suggestions that you can offer.

User avatar
Taylor Larimore
Advisory Board
Posts: 27324
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Bounced check

Post by Taylor Larimore » Thu Jul 12, 2018 9:17 pm

Thanks for any suggestions that you can offer.
student:

Consider just one checking account. Do you really need a second checking account just for taxes?
Henry David Thoreau: "Simplify. Simplify. Our life is frittered away with detail."
Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

User avatar
cfs
Posts: 4154
Joined: Fri Feb 23, 2007 1:22 am
Location: ~ Mi Propio Camino ~

Re: Bounced check

Post by cfs » Thu Jul 12, 2018 9:37 pm

Check with your banks to set up a Line of Credit on your checking accounts, this prevents the check bouncing syndrome. Good luck, y gracias por leer ~cfs~
~ Member of the Active Retired Force since 2014 ~

Loik098
Posts: 630
Joined: Mon May 30, 2016 9:29 pm

Re: Bounced check

Post by Loik098 » Thu Jul 12, 2018 9:43 pm

Your credit is affected when your payment is more than 30 days late....not until then. The most a payee can do is charge you a fee if you're still within that 30 day window.

mouses
Posts: 3650
Joined: Sat Oct 24, 2015 12:24 am

Re: Bounced check

Post by mouses » Thu Jul 12, 2018 11:10 pm

student wrote:
Thu Jul 12, 2018 9:08 pm
So the check bounced. I found out via an email from the bank today.
If the bank were nice, it would have let you dump money into your checking account to cover the check. In my experience, only credit unions are nice.

RickBoglehead
Posts: 657
Joined: Wed Feb 14, 2018 9:10 am

Re: Bounced check

Post by RickBoglehead » Fri Jul 13, 2018 7:28 am

Banks offer free overdraft coverage from your savings account.

User avatar
lthenderson
Posts: 3432
Joined: Tue Feb 21, 2012 12:43 pm
Location: Iowa

Re: Bounced check

Post by lthenderson » Fri Jul 13, 2018 7:57 am

student wrote:
Thu Jul 12, 2018 9:08 pm
Thanks for any suggestions that you can offer.
We have one checking account linked to a savings account (our emergency fund) which the bank can automatically transfer money from if we ever were to overdraft a check.

criticalmass
Posts: 580
Joined: Wed Feb 12, 2014 10:58 pm

Re: Bounced check

Post by criticalmass » Fri Jul 13, 2018 8:05 am

student wrote:
Thu Jul 12, 2018 9:08 pm
I guess I am getting senile. My check bounced. I have two checking accounts that I use. The main one that I use to pay tax and a secondary one that I use to pay monthly association fees and to small merchants. For security, I keep a very small balance on the secondary checking account. When I paid my property tax last week, I used the wrong check. Instead of the one from the main account, I used the one from the secondary account. So the check bounced. I found out via an email from the bank today. I called the property tax office and offered to bring in a new check this afternoon. The lady said the original check has not been returned to them yet. She took my phone number and said she will call me when the check is returned, then I can go in with a certified check and $25 fee. The deadline is in September. So I am not delinquent. My concern is whether this will affect my credit. How come I minimize the effect? Thanks for any suggestions that you can offer.
Your credit will not be affected. Your bank may report the bounced check to Chex Systems and Early Warning System. In practical terms, that can make it more difficult to open a new checking account for awhile, but will have no effect on your existing bank portfolio.

barnaclebob
Posts: 2886
Joined: Thu Aug 09, 2012 10:54 am

Re: Bounced check

Post by barnaclebob » Fri Jul 13, 2018 9:42 am

You are outsmarting yourself. What does two checking accounts protect against? Use a bank that will have your money replaced fast if the account is drained by fraud.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Fri Jul 13, 2018 10:27 am

mouses wrote:
Thu Jul 12, 2018 11:10 pm
student wrote:
Thu Jul 12, 2018 9:08 pm
So the check bounced. I found out via an email from the bank today.
If the bank were nice, it would have let you dump money into your checking account to cover the check. In my experience, only credit unions are nice.
I wish they contacted me to ask for money to cover the check. To be fair to them, they reversed the insufficient fund charge of $30 automatically since this was my first time.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Fri Jul 13, 2018 10:28 am

criticalmass wrote:
Fri Jul 13, 2018 8:05 am
student wrote:
Thu Jul 12, 2018 9:08 pm
I guess I am getting senile. My check bounced. I have two checking accounts that I use. The main one that I use to pay tax and a secondary one that I use to pay monthly association fees and to small merchants. For security, I keep a very small balance on the secondary checking account. When I paid my property tax last week, I used the wrong check. Instead of the one from the main account, I used the one from the secondary account. So the check bounced. I found out via an email from the bank today. I called the property tax office and offered to bring in a new check this afternoon. The lady said the original check has not been returned to them yet. She took my phone number and said she will call me when the check is returned, then I can go in with a certified check and $25 fee. The deadline is in September. So I am not delinquent. My concern is whether this will affect my credit. How come I minimize the effect? Thanks for any suggestions that you can offer.
Your credit will not be affected. Your bank may report the bounced check to Chex Systems and Early Warning System. In practical terms, that can make it more difficult to open a new checking account for awhile, but will have no effect on your existing bank portfolio.
Thank you for the info.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Fri Jul 13, 2018 10:34 am

barnaclebob wrote:
Fri Jul 13, 2018 9:42 am
You are outsmarting yourself. What does two checking accounts protect against? Use a bank that will have your money replaced fast if the account is drained by fraud.
Thanks for the comment. My thought is that the account number can be misused by something such as printing checks. So for places (small number) that I have to use checks and I do not fully trust yet, I use the secondary account. Since I only keep a few hundred dollars there, I limit the damage. I do understand that the bank is suppose to replace the amount that is obtained by fraud. I am kind of paranoid about these things so I designed a backup plan.

barnaclebob
Posts: 2886
Joined: Thu Aug 09, 2012 10:54 am

Re: Bounced check

Post by barnaclebob » Fri Jul 13, 2018 10:52 am

student wrote:
Fri Jul 13, 2018 10:34 am
barnaclebob wrote:
Fri Jul 13, 2018 9:42 am
You are outsmarting yourself. What does two checking accounts protect against? Use a bank that will have your money replaced fast if the account is drained by fraud.
Thanks for the comment. My thought is that the account number can be misused by something such as printing checks. So for places (small number) that I have to use checks and I do not fully trust yet, I use the secondary account. Since I only keep a few hundred dollars there, I limit the damage. I do understand that the bank is suppose to replace the amount that is obtained by fraud. I am kind of paranoid about these things so I designed a backup plan.
I'd bet that check fraud is extremely rare these days. If the money is stolen it will be because your debit card number was used but if you don't have a debit card then having two accounts is definitely overkill. If you are just paying property tax out of the main account then presumably you can keep the balance low there for all but the two months you need to pay your property tax.

criticalmass
Posts: 580
Joined: Wed Feb 12, 2014 10:58 pm

Re: Bounced check

Post by criticalmass » Fri Jul 13, 2018 3:19 pm

barnaclebob wrote:
Fri Jul 13, 2018 10:52 am
student wrote:
Fri Jul 13, 2018 10:34 am
barnaclebob wrote:
Fri Jul 13, 2018 9:42 am
You are outsmarting yourself. What does two checking accounts protect against? Use a bank that will have your money replaced fast if the account is drained by fraud.
Thanks for the comment. My thought is that the account number can be misused by something such as printing checks. So for places (small number) that I have to use checks and I do not fully trust yet, I use the secondary account. Since I only keep a few hundred dollars there, I limit the damage. I do understand that the bank is suppose to replace the amount that is obtained by fraud. I am kind of paranoid about these things so I designed a backup plan.
I'd bet that check fraud is extremely rare these days. If the money is stolen it will be because your debit card number was used but if you don't have a debit card then having two accounts is definitely overkill. If you are just paying property tax out of the main account then presumably you can keep the balance low there for all but the two months you need to pay your property tax.
Check fraud is alive and well, and is one reason why merchants have become adverse to accepting checks in the last decade.

But you don’t need to use checks to commit fraud on a bank account. Electronic fraud is simpler, faster, and easier. The routing and account numbers are all one needs.

That said, I would consolidate checking accounts and keep things simple. Let Regulation E and your own regular account monitoring protect you. It’s a lot easier to monitor one account than several.

User avatar
Stinky
Posts: 158
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Bounced check

Post by Stinky » Fri Jul 13, 2018 4:08 pm

Taylor Larimore wrote:
Thu Jul 12, 2018 9:17 pm

Consider just one checking account. Do you really need a second checking account just for taxes?
Best post of this thread.
It's a GREAT day to be alive - Travis Tritt

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Sat Jul 14, 2018 4:46 am

Thank you for answering. I appreciate your comments.

criticalmass
Posts: 580
Joined: Wed Feb 12, 2014 10:58 pm

Re: Bounced check

Post by criticalmass » Sat Jul 14, 2018 9:50 pm

barnaclebob wrote:
Fri Jul 13, 2018 10:52 am

I'd bet that check fraud is extremely rare these days. If the money is stolen it will be because your debit card number was used but if you don't have a debit card then having two accounts is definitely overkill. If you are just paying property tax out of the main account then presumably you can keep the balance low there for all but the two months you need to pay your property tax.
See also:
viewtopic.php?f=11&t=253908

michaeljc70
Posts: 3339
Joined: Thu Oct 15, 2015 3:53 pm

Re: Bounced check

Post by michaeljc70 » Sat Jul 14, 2018 10:50 pm

It won't affect your credit. I have never heard of them reporting to credit reporting agencies for property taxes. They can put a lien on your house and take your house away so they don't need to bother with that.

You have two checking accounts, paid the taxes due in Sept in July and bounced a check? Sounds like a crazy system to me. I keep "enough" money in my one checking meaning it is enough that no matter what bills I pay, it will cover it. Of course, I also keep track and download my transaction almost daily into Quicken. But there is a buffer in case I forget something. With rates so low it doesn't make sense to transfer a few thousand to a money market.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Sun Jul 15, 2018 5:03 am

michaeljc70 wrote:
Sat Jul 14, 2018 10:50 pm
It won't affect your credit. I have never heard of them reporting to credit reporting agencies for property taxes. They can put a lien on your house and take your house away so they don't need to bother with that.

You have two checking accounts, paid the taxes due in Sept in July and bounced a check? Sounds like a crazy system to me. I keep "enough" money in my one checking meaning it is enough that no matter what bills I pay, it will cover it. Of course, I also keep track and download my transaction almost daily into Quicken. But there is a buffer in case I forget something. With rates so low it doesn't make sense to transfer a few thousand to a money market.
Thank you for your comments. I have enough money in my primary checking account where my paycheck is deposited. Then credit card bills are paid and investment are taken from this account. So I keep a healthy balance in this account. Because of this, I only want to write checks (with account numbers on it) to places that I trust on this account. Hence the decision of two accounts. I am a very paranoid person. I afraid that I may forget to pay the tax so I almost always pay it the same week that I receive the bill. I do this on all my bills. I may have to reconsider my system and find a better way.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Sun Jul 15, 2018 5:05 am

criticalmass wrote:
Sat Jul 14, 2018 9:50 pm
barnaclebob wrote:
Fri Jul 13, 2018 10:52 am

I'd bet that check fraud is extremely rare these days. If the money is stolen it will be because your debit card number was used but if you don't have a debit card then having two accounts is definitely overkill. If you are just paying property tax out of the main account then presumably you can keep the balance low there for all but the two months you need to pay your property tax.
See also:
viewtopic.php?f=11&t=253908
I saw this yesterday. Thank you. I am going to use a gel pen instead of a ball point pen henceforth.

User avatar
GoldStar
Posts: 409
Joined: Wed May 23, 2018 10:59 am

Re: Bounced check

Post by GoldStar » Sun Jul 15, 2018 8:13 am

1) Go down to 1 checking account.
2) Stop writing checks to small merchants- use a credit card. Nearly everyone takes them now. If not - use cash.
3) stop writing checks in general. Use online bill payments and automate where appropriate.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Bounced check

Post by Pajamas » Sun Jul 15, 2018 8:25 am

I think it's okay to have at least two different checkbooks for different accounts even if it is not necessary. I don't write a lot of checks but a checking account still is useful in ways that a savings account or a brokerage account is not. I have checkbooks for both my checking account and brokerage account.

The trick is to differentiate the checkbooks. Use different colored covers, write the name of the institution and account number on the covers, keep them in different file folders, etc.

I now pay estimated taxes both federal and state electronically. The money is drawn from my checking account but no paper checks are involved. It's much easier than completing a payment form and writing and mailing a check and there is less chance of the money not making it where its supposed to go. You can probably do the same. Might take a few minutes to set it up but after that it takes less than a minute to make a payment and initial confirmation is almost simultaneous.

michaeljc70
Posts: 3339
Joined: Thu Oct 15, 2015 3:53 pm

Re: Bounced check

Post by michaeljc70 » Sun Jul 15, 2018 9:36 am

student wrote:
Sun Jul 15, 2018 5:03 am
michaeljc70 wrote:
Sat Jul 14, 2018 10:50 pm
It won't affect your credit. I have never heard of them reporting to credit reporting agencies for property taxes. They can put a lien on your house and take your house away so they don't need to bother with that.

You have two checking accounts, paid the taxes due in Sept in July and bounced a check? Sounds like a crazy system to me. I keep "enough" money in my one checking meaning it is enough that no matter what bills I pay, it will cover it. Of course, I also keep track and download my transaction almost daily into Quicken. But there is a buffer in case I forget something. With rates so low it doesn't make sense to transfer a few thousand to a money market.
Thank you for your comments. I have enough money in my primary checking account where my paycheck is deposited. Then credit card bills are paid and investment are taken from this account. So I keep a healthy balance in this account. Because of this, I only want to write checks (with account numbers on it) to places that I trust on this account. Hence the decision of two accounts. I am a very paranoid person. I afraid that I may forget to pay the tax so I almost always pay it the same week that I receive the bill. I do this on all my bills. I may have to reconsider my system and find a better way.
There are a lot of protections whether using checks, a debit card or credit cards. If you really wanted to be paranoid, you could get money orders for everything, but that is a big hassle. I'm not sure what you mean by places you don't "trust yet". You trust the place you pay property taxes? How do you know that every government employee is honest and won't write down or sell the account number? I think you are creating a false sense of protection that doesn't really exist.

tioscrooge
Posts: 30
Joined: Wed May 25, 2016 10:01 pm

Re: Bounced check

Post by tioscrooge » Sun Jul 15, 2018 10:16 am

I had heard Frank Abagnale (the real guy behind the movie "catch me if you can") at a talk he gave a few years ago. He advocated not writing checks if possible. He also said to not have overdraft protection. His point was that the rules and law is not as consumer friendly when one writes a check or uses a credit card. The consumer has only 30 days to detect fraud and to recover the funds from bank by notifying them in a timely manner. Besides, with checking account fraud, the money is gone first and then you have to recover it, whereas with with credit the rules are more favorable, I am told.

There are times you must write a check, so I keep a checking account. Like OP, I have two checking account - but I use one where paychecks go (and also as emergency fund account) and then one where I write checks from. This is to avoid fraud where someone can "dip into" my account. It still was not full proof.

I cut up the debit cards for my emergency fund account on arrival. Yet, a few years later there were two small debit charges in England that I caught in a timely way to reverse them. I guess the thieves were playing with numbers that day and got lucky. I assumed that if I had not caught the small transactions, a large one would have occurred next.

sport
Posts: 7185
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Bounced check

Post by sport » Sun Jul 15, 2018 1:05 pm

It seems the problem of confusing which account to use could be eliminated by simply using a check register (gasp!) for each account. When you write a check, and enter in the register, it would be immediately apparent if there was not enough money to cover the check. But I forget, check registers are old fashioned and useless in this modern age. :twisted:

ResearchMed
Posts: 7082
Joined: Fri Dec 26, 2008 11:25 pm

Re: Bounced check

Post by ResearchMed » Sun Jul 15, 2018 1:19 pm

Pajamas wrote:
Sun Jul 15, 2018 8:25 am
I think it's okay to have at least two different checkbooks for different accounts even if it is not necessary. I don't write a lot of checks but a checking account still is useful in ways that a savings account or a brokerage account is not. I have checkbooks for both my checking account and brokerage account.

The trick is to differentiate the checkbooks. Use different colored covers, write the name of the institution and account number on the covers, keep them in different file folders, etc.

I now pay estimated taxes both federal and state electronically. The money is drawn from my checking account but no paper checks are involved. It's much easier than completing a payment form and writing and mailing a check and there is less chance of the money not making it where its supposed to go. You can probably do the same. Might take a few minutes to set it up but after that it takes less than a minute to make a payment and initial confirmation is almost simultaneous.
We've used not just different checkbook covers, but totally different check paper... different colored check background, especially. That can be spotted easily, even before morning tea or coffee :D

But more recently, we just do online banking almost entirely.
There are very few occasions when an actual physical check "from a checkbook" is needed and online checking wouldn't suffice - and that's only an issue among the few vendors who don't accept charge cards.

RM
This signature is a placebo. You are in the control group.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Sun Jul 15, 2018 1:27 pm

sport wrote:
Sun Jul 15, 2018 1:05 pm
It seems the problem of confusing which account to use could be eliminated by simply using a check register (gasp!) for each account. When you write a check, and enter in the register, it would be immediately apparent if there was not enough money to cover the check. But I forget, check registers are old fashioned and useless in this modern age. :twisted:
Shame. I don't do check register for the primary account as I only write checks on it three times a year. I keep a good buffer in it.

michaeljc70
Posts: 3339
Joined: Thu Oct 15, 2015 3:53 pm

Re: Bounced check

Post by michaeljc70 » Sun Jul 15, 2018 1:38 pm

student wrote:
Sun Jul 15, 2018 1:27 pm
sport wrote:
Sun Jul 15, 2018 1:05 pm
It seems the problem of confusing which account to use could be eliminated by simply using a check register (gasp!) for each account. When you write a check, and enter in the register, it would be immediately apparent if there was not enough money to cover the check. But I forget, check registers are old fashioned and useless in this modern age. :twisted:
Shame. I don't do check register for the primary account as I only write checks on it three times a year. I keep a good buffer in it.
For 3 times a year you could just get money orders or cashier checks. Also, many brokerage accounts (taxable) will let you write checks off of them. But I am guessing if you are worried about fraud, you wouldn't like that either.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Bounced check

Post by student » Thu Jul 19, 2018 5:48 am

student wrote:
Thu Jul 12, 2018 9:08 pm
I guess I am getting senile. My check bounced. I have two checking accounts that I use. The main one that I use to pay tax and a secondary one that I use to pay monthly association fees and to small merchants. For security, I keep a very small balance on the secondary checking account. When I paid my property tax last week, I used the wrong check. Instead of the one from the main account, I used the one from the secondary account. So the check bounced. I found out via an email from the bank today. I called the property tax office and offered to bring in a new check this afternoon. The lady said the original check has not been returned to them yet. She took my phone number and said she will call me when the check is returned, then I can go in with a certified check and $25 fee. The deadline is in September. So I am not delinquent. My concern is whether this will affect my credit. How come I minimize the effect? Thanks for any suggestions that you can offer.
Update. The property tax office did call me back and she was nice about it. I went in and paid with a cashier's check.

Thank you for the comments. I have made a decision after reading them carefully. Although I have decided to keep these two checking accounts, I will not write checks on the main account anymore.

User avatar
LadyGeek
Site Admin
Posts: 47489
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Bounced check

Post by LadyGeek » Thu Jul 19, 2018 9:14 pm

This thread is now in the Personal Finance (Not Investing) forum (check).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Post Reply