Personal checks are steadily falling into disuse. They’re kind of like fax machines—outmoded, slow, with only a hardened group of people still using them even as they become less practical. Is there any good reason to still use paper checks? In some cases, yes—although you still have to be careful about identity theft.
What is a personal check?
Unlike the glowing rectangles of phones or debit terminal displays we usually use for purchases, checks are rectangles made of paper, and they take a long time to be processed through the mail—typically days or weeks later. During that time you will need to make sure the funds are available until the check clears, otherwise the check will bounce and you’ll get dinged with a fee—about $35 on average. Worse yet, if you want to use checks, you often have to pay for them—up to 30 cents a check, depending on your bank (some offer them for free, though).
Still, even with all those negatives, there are some cases in which you have no choice but to use personal checks, or where using them might save you money.
When would I even use a personal check?
As many home renters can attest, not all businesses or organizations accept credit card or debit, particularly for large purchases. This is because some businesses have slim margins and want to avoid transaction costs, or they’re large entities like utilities or government agencies that have been slow to accept plastic. And when they do accept debit or credit, it’s often processed by third-party payment processing companies that charge a fee every time you use them, which makes checks a more practical option if you want to save money.
Another overlooked reason why people use checks is that 10% of U.S. adults don’t use the internet. In this case, bills are easier to pay with a check than paying in person with cash. And some people simply prefer the traceability of checks, as you can access a canceled check through your bank once it clears, making it easier to settle a dispute with a creditor or business later.
If you’ve ever received a check tucked into a birthday card from your grandma, you’ll know that checks are also a preferred method of sending someone a cash gift.
Are personal checks secure?
Not quite. The problem with checks is they contain your banking information (sometimes your address, too), and they get handled by a lot of different people before they’re actually cashed, making them a target for identity thieves. In fact, one of the reasons debit and credit cards became more widely adopted is that they were considered a more secure method of making a purchase.
If you use checks, avoid adding extra personal information in the memo field of the check (like your birth date, telephone or driver’s license number), and if you can avoid the checks being printed with your address on them, do so. You’ll also want to keep your check book somewhere safe and secure, ideally in a locked drawer at home.