What Is a Bounced Check?

A bounced check is a slang term for a returned check that a bank cannot process because the account holder has 澳洲幸运5官方开奖结果体彩网:non-sufficient funds (NSF) available for payment. Banks return, or “bounce,” these checks, also known as 澳洲幸运5官方开奖结果体彩网:rubber checks, rath𓃲eꦉr than honor them, and banks charge the check writers NSF fees.

Passing 澳洲幸运5官方开奖结果体彩网:bad checks can be illegal, and the crime can range from a misdemeanor to a felony, depending on the amount of the check and whether the activity involved crossing state lines.

Understanding a Bounced Check

Account holders may write a bad check inadvertently, unaware their bank balances have insufficient funds. Some consumers use 澳洲幸运5官方开奖结果体彩网:overdraft protection to avoid bouncing checks by attaching a 澳洲幸运5官方开奖结果体彩网:line of credit to their checking accounts. If you overdraw youꦫr account, the bank automatically draws on the line of credit and deposits the 🏅funds to cover the overdraft.

A bounced check may result in overdraft fees, restrictions on writing additional checks, and negative impacts on your 澳洲幸运5官方开奖结果体彩网:credit score. Writing too many bounced checks may also prevent you from being allowed to 澳洲幸运5官方开奖结果体彩网:pay merchants by check in the future.

Many merchants use a verification system called TeleCheck to help them determine if a customer’s check is good. If this system connects the check you’ve just presented for payment to a history of unpaid checks, the merchant will decline your check and ask you for a different form of payment.

Are There Fees for Bounced Checks?

If an account has insufficient funds, and a bank bounces a check, it ꦿcharges the account holder an NSF fee. If the bank pays or honors a check while the account has a negative balance, the bank charges an overdraft fee. If the account remains negative, the bank may chargeꩵ an extended overdraft fee.

Bank charges for bounced checks and overdrafts can vary. The average overdraft in 2024 was $27.08, an increase from $26.61 in 2023. Banks usually assess this fee on drafts for checks, electronic payments, and some 澳洲幸运5官方开奖结果体彩网:debit card transactions.

What Happens When a Check Bounces?

Bank and 澳洲幸运5官方开奖结果体彩网:credit union fees are just one part of bouncing a check. In many cases, the payee also assesses a charge. For example, if someone writes a check to the grocery store and the check bounces, the gr🎐ocery store may reserve the right to redeposit the check and require the check writer to pay them a bounced-check fee.

In other cases, if a check bounces, the payee—the person or company who received the check—may report the issue to 澳洲幸运5官方开奖结果体彩网:debit bureaus such as 澳洲幸运5官方开奖结果体彩网:ChexSystems, which collects financial data on savings and checking accounts. Adverse reports with organizations like ChexSystems can make it challenging for consumers and businesses to open checking and 澳洲幸运5官方开奖结果体彩网:savings accounts in the future.

How to Avoid Bounced Checks

Consumers can reduce the number of bounced checks they write by tracking their bank balances, recording every debit and deposit on a check register as soon as it occurs, and keeping close tabs on their checking account by using 澳洲幸运5官方开奖结果体彩网:online banking.

Consumers also can fund a savings account and link it to their checking account to cover overdrafts. Alternatively, consumers may write fewer checks or use cash, 澳洲幸运5官方开奖结果体彩网:debit cards, and immediate online payments such as 澳洲幸运5官方开奖结果体彩网:mobile wallets, PayPal, or the like for discretionary spending.

The Bottom Line

From costly fees to hampering your ability to open new checking and savings accounts, bounced checks can have serious consequences. Fortunately, through preparation and diligence, you can avoid bounced checks. If you’re concerned about accidentally writing a bad check, consider overdraft protection through your bank, which links a savings account or credit line to the ൩checking and funds shortfalls due to overdrafts.