You wake up one morning and decide to check your bank account. To your shock, you discover that you have bounced a check. Now what? Don’t worry, we are not judging your reaction. Bouncing a check is very common, and you are not alone in feeling nervous about it. If you are in the habit of writing checks frequently (and we know you are because you are reading this article), then it is highly likely that you will bounce at least one check. So let’s take a look at how to prevent this from happening and what you should do when it does happen. We will try to answer all of your questions about this very common financial problem so you can feel more confident about buying that new car or paying your overdue bills on time. Let’s get started.
The Most Common Reasons for Bouncing a Check
There are several reasons why checks may bounce. Sometimes the bank just doesn’t have enough funds to honor the check. This can be caused by several factors, including:
- A poorly written check
- A check with insufficient funds
- An error on the bank’s part
- Too many checks bouncing in the same day
- A combination of these factors
If your check bounces due to insufficient funds, then it depends on you what action you should take. You may want to contact your bank and dispute the transaction or you may decide to repay the check via a direct deposit from your next paycheck. Remember, though, that if the check bounces several times, it may be best to stop writing checks altogether. Trust me, we’ve been there, and it’s not a pretty sight. Let’s take a look at each of these cases in more detail.
A Check with Insufficient Funds
Often times when a check is written, the bank will try to verify that there actually are funds available in the account before approving the transaction. If the check is written for more money than is available in the account, then the bank will either decline the check or ask you to fill out a draft. A draft is simply a note that you agree to pay the check when it is presented to you. A draft has the same effect as a cashier’s check, except that it does not require the bank’s approval before it can be used. You can also write a check with a draft, but to receive payment you will have to present the draft along with the check. If you decide against presenting the draft, then you risk having the check canceled by the bank. You can also ask the bank to waive the fees associated with a declined or returned check, but it’s your responsibility to ensure that the check is covered by sufficient funds.
An Error on the Bank’s Part
It is extremely rare that a bank would deliberately try to charge you for a nonexistent item, but it does happen from time to time. These types of errors occur because of human error or because of a mistake on the part of the bank’s automated payment systems. Sometimes the error will be on the part of the bank when it processes your check. If there is an error when it comes to processing your check for payment, then in some cases the bank may choose to forgive the debt and offer you a new check. In other cases, they may decide to write you a letter of apology and ask you to contact their corporate headquarters for further information. Unfortunately, there is sometimes no clear answer when it comes to how to handle these types of issues individually.
Too Many Checks Bouncing in the Same Day
This happens when the bank sees that there are too many checks being written on one account in one day. The bank may block all checks from that account until further notice, or they may just try to reduce the number of checks being written to ensure there are no overdrafts. Sometimes this happens because there is a mistake in the bank’s system and the account is actually over-inclusive. For example, maybe you are an employee and have an HSA (Hospital, Surgical, and Accident) insurance plan through your employer. Your employer may have made a mistake when it came to processing your enrollment, and in some cases the HSA coverage may be included in your general account. When this happens, it’s usually because the bank does not have enough funds in the account to cover all of the checks that are being written. This is why it’s so important to notify the bank as soon as possible if this ever happens. It would be best to have this resolved as soon as possible so you can get your finances in order and continue to make timely payments.
Combination of the Above
Sometimes it’s not just one thing that causes a check to bounce, but a combination of all of the factors listed above. If you wake up one morning and discover that your check has bounced, then there is no clear-cut answer as to what you should do. You will have to take into consideration how you feel about the situation, and what you want to happen. Sometimes the best solution is to call the bank and dispute the charge. In other cases, it may be best to write a check for the exact amount due. Hopefully, this guide will help you understand more about why checks sometimes bounce and what you can do about it. If you are the recipient of a bounced check, then please feel free to contact us so we can learn more
Now that you are equipped with the knowledge necessary to avoid this problem in the first place, it’s time to take action. We hope this article has helped you feel more confident about writing checks and paying your bills on time. Remember, if you make a habit of writing checks frequently, then this problem is almost inevitable. So now that you know the causes and the effects, it’s time to try and put a stop to it once and for all.