DID I DO THAT?
Writing allows for a certain amount of anonymity and that in turn affords me the opportunity to divulge all of my financial mishandlings to you. I’m sure I won’t let you in on some of the bigger blunders but I have no shame in telling you that last week, I bounced a check. Ok, maybe I feel a little shame.
It was the first time this had happened to me in years. The truth of it was that the payment that would go on to be returned was only short by less than five dollars. Regardless, my bank that I have been doing business with for years now, did not see this measly amount as something that they could let slide. Subsequently, there were penalties that needed to be paid.
My bank charged me $40 for the unholy inconvenience they suffered for having to return my payment. The other institution to which I owed the money charged me an additional $26 for what was now a late payment. That is nearly $70 in charges for a shortage of 5 bucks. I would be livid but my doctor recommends against angry tirades.
It seems to me that the people who bounce checks are those who are struggling financially. It isn’t that I think banks should reduce their fees to a mere slap on the wrist for these clients but those that are struggling will certainly continue to struggle as long as they have to pay these kinds of fees. If they couldn’t afford the payment, how does the bank expect them to cover another 70 bucks?
As I mentioned before, it wasn’t the first time I ever bounced a check but it was the first time I bounced one since I began working in the banking industry. I figured I could no longer allow ignorance to continue being my bliss and so I did some investigation into the consequences of bouncing checks. What I discovered is that I already suffered those.
The fees that the banks charge are the most severe consequences of bouncing checks, assuming you are not making a habit out of it. They are not reported to your credit bureau. That said, your bank itself does keep a record of how many times you bounce a check. This could make it difficult for you when it comes time to ask your bank for financing. If you asked for financing at another bank though, they would not know your NSF (insufficient funds) history unless you gave them permission to ask your bank.
The other danger that you risk is that the company or bank that you were supposed to pay can and quite likely will report your late payment to the credit bureau. If it happens often enough, they may even refuse to accept checks or automatic withdrawals as a method of payment from you.
The best way to avoid bounced checks is to attach a credit card or a line of credit to your bank account as an overdraft protection. You could also just apply for an overdraft protection account. There are fees for using the overdraft but they are minimal in comparison to the NSF fees. Trust me; they are teeny tiny in comparison and so worth it!
Note about the author:
Joseph Belanger is a Toronto-based writer who blogs about film at www.blacksheepreviews.com
