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Why You Still Need Paper Checks and How to Use Them Safely

By Lainie Petersen

checkUntil about five years ago, I used to carry my checkbook everywhere. In fact, some of my purses even had a special compartment that provided easy access to my oft-used pad of checks. Nowadays, however, I leave my checkbook at home. In fact, I can’t remember the last time I wrote a paper check.

This change in consumer behavior is the result of several factors, including the introduction of more convenient payment methods, the growth in online shopping, concerns about fraud and identity theft, and a desire to avoid bounced check fees. For many people, it is faster and simpler to swipe a debit or credit card than it is to write out a check while shopping at brick and mortar establishments. Many online merchants only accept credit and debit cards. Online bill payment services make sending payments easier by automating the process.

Security is another reason for the decline in use of paper checks. If a checkbook is lost or stolen, victims might face a nightmare of trying to undo the damage. Additionally, personal checks often contain a wealth of personal and banking information for identity thieves and other scammers. Since money is not withdrawn immediately from a bank account when someone writes a paper check, bouncing checks (and paying high fees) becomes more of a concern.

However, in spite of all this, there are a few compelling reasons not to ditch your checkbook entirely.

Why You Still Need Paper Checks

Sometimes it makes more sense (or is your only choice) to use a paper check instead of another means of payment. Here are several ways checks can be more convenient, save you money, or protect your finances:

  • Some Businesses Charge Extra Fees for Credit Card Payments. Utility companies and government agencies may accept credit or debit cards, but only through third-party processors. These payment processors charge a fee every time you use a credit card to make a payment.
  • You Can Pay During Utility Outages. Stores rely on electronic equipment to process debit and credit card transactions. If the power or phone systems are down in your area, checks and cash are likely to be the only way you’ll be able to make a purchase. Since the ATMs are also likely to be out of service, a paper check may be the only way that you can buy food and other necessary supplies for you and your family.
  • Some Businesses Prefer Paper Checks or Money Orders. As strange as it may seem, some businesses don’t accept credit or debit card payments. These businesses include insurance agents and companies, some government offices, tradespeople, organizations (such as churches, fraternal lodges, and community groups) that charge dues or accept donations, and landlords. You may also occasionally encounter an old-fashioned retail business owner who abhors plastic but who is happy to take your check.
  • Some Retail Shops Enforce a Minimum Credit Card Purchase. Credit card processors and banks charge businesses a fee when customers pay with a credit card. This fee can take a big bite out of small purchases, so many businesses set a minimum amount for credit card purchases. If you don’t have another form of payment, this could result in you wasting money on an item you don’t need in order to meet the minimum. There’s no fee to deposit a check, so there’s generally no minimum purchase required.
  • Checks are Traceable. If traceability is important to you and the payee doesn’t accept debit or credit cards, paper checks offer a level of traceability that you can’t get from money orders, cashier’s checks, automatic bill pay systems, or cash. When you mail someone a paper check, you can select the type of mail service that you want to use, along with a tracking method. (Being able to document the mailing date of a payment can be important with some types of payments, such as insurance premiums or taxes.) Once your check clears, you’ll have access to a copy of the canceled check through your bank. If there is any dispute over your payment, you can easily produce your mailing receipt and provide the business or creditor with a copy of your canceled check. If you paid with a money order, particularly a non-bank money order, tracing the payment can be costly and time-consuming.
  • Gift Giving. Gift recipients can deposit your check into their bank accounts and spend the cash however they like, unlike gift cards, which may be restricted to a merchant, can only be used at merchants that accept a particular credit card brand, or charge fees for maintenance or cash withdrawals at an ATM.
  • Checks Are Less Costly Than Money Orders. My bank charges five dollars for a money order. Even postal money orders cost over a dollar each, more if issued in international currency. Non-bank money orders often cost less, but their issuers may charge high tracing or replacement fees if the money order is lost or destroyed. Of course, there are circumstances where money orders are more appropriate, such as when a payee asks for guaranteed funds or you need to complete a financial transaction quickly without waiting for a check to clear.

check

Protecting Yourself When Using Paper Checks

If you do use paper checks, it’s important to guard against financial and identity theft. Here are some tips:

  • Guard Your Checks. Keep your paper checks in a safe place at home. While it’s understandable that you’d want to keep your checkbook handy for paying bills, you should still keep it in a safe space, such as a locked desk drawer. Ditto for boxes of extra checks. It’s also a good idea to write down the lowest and highest check numbers on the supply of checks that you have at home. Keep this information in a safe place: If your home is robbed, you’ll want to check your check supply to make sure that the thieves didn’t make off with your checks.
  • Record Your Check Use. Record every check you write in your checkbook register. Some check printers provide duplicate check pads that leave you with a carbon copy of each check you write.
  • Only Use Checks When Necessary. When possible, use cash, plastic or electronic payment systems to pay bills or for purchases. Even if a business owner is completely honorable, an employee or thief may get a hold of your check and use it to steal your identity or money.
  • Securely Mail Your Checks. If you make check payments by mail, never leave them for your mailman in an unlocked mailbox or in your office’s “outgoing mail” basket. Place the envelope containing your check in a postal service mailbox, or bring it directly to the post office.
  • Be Cautious About What You Print or Write on Your Checks. Don’t write your life story on your checks. Your check should contain your name, address, and nothing more. Only write your phone number or driver’s license number on your check if a merchant asks for this information. More information makes it easier for identity thieves to impersonate and harm you.
  • Protect Checking Account Information. Be careful about giving out checking account information. If you aren’t well acquainted with a business – particularly if it operates primarily online – be wary about making payments through electronic checking account debit.
  • Check Your Account Transactions Daily. Just looking at your bank balance isn’t enough. Check your transactions daily. If you don’t recognize a transaction, no matter how small, contact your bank.
  • Don’t Write a Check if You Don’t Have the Funds. Last but not least, don’t forget what you learned when you opened your first checking account. Never write a check if you don’t have the funds for it in your account. Not only are you opening yourself up to bounced check fees, but writing a bad check is illegal in many states.

Final Word

Paper checks still have a role in personal finance management, so don’t forget how to use them properly. Protect your personal information by restricting the information that you include on a check. Finally, evaluate your payment options before paying a bill or making a purchase so that you can choose the payment method that makes the most sense.

Do you still carry a checkbook?  Do you write checks often?

Lainie Petersen
Lainie Petersen holds master's degrees in Library and Information Science, Theological Studies, and Divinity, and spent five years working in regulatory compliance for a major education publisher. A lifetime Chicagoian, she recently spent almost a year living in the woods of Southern Oregon before deciding to head back home to her family and friends.

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  • Daphne

    I can’t remember the last time I ordered checks. The checks I have now will last me a long time. I only write one check per month so I’m good.

    • http://www.lainiesips.com/ Lainie Petersen

      Yeah, I ordered my last batch of paper checks back in 2009! I think.

  • Carson

    Gifts for the kids

  • Amanda Brooke Edwards

    I agree that it’s very important to have checks for all of the reasons mentioned, but I think the most important thing you touch on in this article is checking your account balance daily. So often, without even realizing it, we sign up for this or that service and do not realize that our account is going to be charged on that date each month. Before we know it we’re in overdraft because we went ahead and paid for 12 months of eyebrow waxes instead of one and forgot about that automatic debit.
    It’s becoming more and more common for services to be on payment plans that automatically withdraw money without any notification and we all need to keep a daily eye on our accounts in order to keep these things close.

    • http://www.lainiesips.com/ Lainie Petersen

      You are so spot-on here, Amanda. Autodrafts can be convenient, but they also wreck havoc on your checking account if you aren’t careful. Thanks for commenting!

  • Jesse

    If I win, I will put this $$$ towards my next ten year old car.

  • Sazzy

    I will spend my holiday cash toward paying off my debt!

  • momma4

    I put the money towards a family vacation.

  • linda w.

    I will use it toward debt most likely or buy a few Christmas presents for the kids.

  • Louly McButter

    I’ll buy presents for my entire family!

  • Anissa

    I’ll use it towards some room renovations we’ve been planning (paint and such).

  • Kevin Vesga

    I will use the money to upgrade my computer or just use it for gifts during the holiday season.

  • jlafount

    I would like to get a Sony Playstation 4 system this Christmas time

  • Kyla Hickey

    I will use it to fund my dream trip of going to Hawaii :)

  • http://www.berraksarikaya.com/ Berrak

    Paying bills.

  • AshleyTucker

    I will use it to buy clothes

  • An Gooch

    I would use this money to buy a new cd player

  • Kat McQuaid

    With four kids, there are many gifts to buy, but I will try to get everything on sale this Christmas.

  • Mike GetRichWithMe

    Cheques will always have a place in this world
    I’m the treasurer of our local fishing club, all our financial transactions are completed by cheque, and require the signature of two out of three signatories on the account.
    If cheques disappeared, many clubs, societies and charities would find it hard to manage their finances in a way that protects members against fraud

    • http://www.lainiesips.com/ Lainie Petersen

      Absolutely, Mike. I mentioned clubs and organizations in the article because I know that many aren’t set up to take credit cards, but also prefer to not deal in cash. Thanks for posting.

  • Tammy

    I would buy a tablet for my husband

  • http://brokenwon.blogspot.com/ won

    My checks have my two-houses-ago address on them. However, I do use them about once a month. If I won, I’d use the money toward our Christmas holiday. Thank you.
    Wendy T

  • http://wealthnote.com/ Ted Levi Blackman

    My holiday cash will be spent on student loans just like all my extra money!

  • brokeGIRLrich

    I would use my holiday cash to buy everyone’s presents. Then I can use the cash I was going to use to keep on investing.

  • Chris

    I would use the money to pay my back taxes, and buy my granddaughter a Christmas present

  • Jamie Larimore @Jamie1086

    I will buy some groceries and Christmas presents!

  • Sazzy

    I will get my parents a great Christmas gift (dad a humidifier for his allergies and Mom the new purse she wants!)

  • Anna Pry

    if i receive it in time i’d use it for christmas gifts

  • Lee

    I’ve recently started writing checks again. So much easier for schools, kids activities, lessons, that fund raiser order you forgot you made, etc. I don’t care much for auto payments so I use a different account for all of those.

  • nancy

    School activities, scout activities, sports activities, campgrounds, craft fairs, some of the holiday kiosks, and most recently my husband’s parking ticket.

  • Alfred E. Pennymyer

    I rarely write paper checks yet I am glad I have them. I use them for immediately paying someone who does not take credit cards. I also use them when the payment requires a form to be sent alongside payment. For example I routinely donate money to organizations such as The Wounded Warriors Project which requires a form to be filled out alongside check donation particularly if you wish said donation to be in a soldiers memory.

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