Does anyone still use checks? Yes, check users are few and far between and many consider checks outdated, but they’re still out there and they have a few applications left. Most notably, the people using checks aren’t fond of, or fluent in the ways of the internet. Additionally, businesses can use outsourced payment processing to pay employees in checks. Checks are common for deposits such as those made on buying or renting real estate as well.
Continue reading to learn more about how checks can still be used in the modern financial world.
Different Parts of a Check
Before we get into whether people still use checks, let’s look at the different parts of a check.
Your Name and Mailing Address
Your name and mailing address is typically displayed in the top right corner. It establishes who the check is from.
The Check Number
The check number helps you and whoever cashes the check keep track of your payments and the order in which you’ve written checks.
Pay to Order Line
The pay to order line establishes who the person writing the check is paying. It is in the middle portion of the check and the person writing the check must write out the name of the person or business to which the check is addressed.
The amount box is a numerical box that has the written representation of the payment amount. As verification, there is a line beneath the “pay to order” line establishing the check’s amount in words.
On the lower right portion of the check is the signature line, turning the check from a piece of paper into a legal tender.
The memo line is a somewhat superfluous portion of the check where you can choose to either write a memo to yourself or the person to whom the check is addressed.
Bank Routing Number
Your bank’s routing number should be displayed at the very left bottom corner of the check. The nine digit number identifies the financial institution involved in the transaction, telling the bank to release your funds to the payee in the amount you’ve written on the check.
More than One Way to Sign
After receiving a check, you need to endorse it on the back. If you intend to deposit the check, you can add an extra layer of security by writing “for deposit only” underneath your signature, along with your account number. This is known as a restrictive endorsement and it tells the bank to prohibit the use of the check for any other purpose besides deposit.
Why Would You Use Checks?
There is no doubt checks are an old-school method of payment. However, even though some people may label them outdated and useless, checks still have their place in the personal and professional environment. For example, many deposits require the use of checks and landlords also might still only accept checks.
Some small business owners expect payment by checks and paying the IRS through checks is always an easy way to fulfill your obligations. Some companies may also charge processing fees for paying with a credit card. There are no fees for processing checks.
7% of adult Americans still aren’t on the internet and around 19% of households making less than $30,000 don’t use the internet. If you live in one of these households paying your rent with a check by mail might be the only possible option.
Are Personal Checks Secure?
The need for security has shifted much of society away from using checks as the preferred payment method. If a check falls into the wrong hands or gets lost, it can compromise your identity and expose your information to strangers. If your address is on the check, someone might have all the banking information they need to rob you.
If you lose your credit card or it gets stolen, you can easily cancel the credit card. If you lose your check and your bank account information winds up in the hands of a scammer, you would likely have to close the account itself to protect your money.
Checks aren’t often cashed the same day as they are written, leaving you with the possibility of your check bouncing. When someone claims a check has bounced it means the funds written on the check were not supported by the funds in the specified account. Bouncing checks can result in banking fees and writing “bad checks” (knowingly writing a check without supporting funds) is against the law in most states.
Checks leave paper trails, a reason some people like using them. Whether you use checks or conduct your banking online, having a physical backup for your financial information is advisable.
Proper Check Etiquette
It should be noted that while stores and businesses often accept checks as a means of payment, you should be courteous to other shoppers in the store and avoid taking too long writing the check out. If you know you will be using a check, you should fill out the parts you can ahead of time and leave the amount and signature blank until you know all of the purchase details.
Though many people still use checks, they are rapidly becoming outdated. However, given the right circumstances they can be useful alternatives to electronic means of payment. For example, if you want to keep track of your payment and you prefer a more tangible representation of your financial transactions, writing a check can be preferable to electronic means.
However, if you want to secure your check you should make sure to keep it on your person at all times to avoid losing it and allowing other people access to your personal and financial information.