When to Use Checks and How to Use Them Safely

Father making a child support payment
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You may think of paper checks as a thing of the past now that there are digital payment methods like Venmo, Zelle, and Apple Pay, but there are still some instances in which it may be best to use them. Here’s when it may be safer or preferable to use a personal or paper check, how to use checks safely, and when it’s OK to skip them.

When to Consider Writing a Check

You may want to write a check when in one of the following situations:

  • Shopping at a small business
  • Gifting money
  • Tracing important payments
  • Protecting your identity

Shopping at a Small Business 

Due to their size and credit card processing fees, some small businesses don’t accept credit cards. In fact, one study found that only 27% of small businesses prefer digital payments (think credit cards or ApplePay) over non-digital payments (like cash, checks, and money orders). So if you hire someone to mow your lawn, purchase goods from a local store or flea market vendor, or even have the occasional dog walker, you may want to keep a checkbook on hand to pay them.

Gifting Money

If you’re strapped for time and are heading to a birthday party, wedding, or special family event, that probably means tucking money into a card. But when giving money as a gift, checks may be a better option than cash. While both cash and checks can easily be lost in the excitement of unwrapping gifts, one is addressed specifically to the person and one is not. This can help the recipient remember who gave them the money. If they set cash to the side and revisit it later, they may not remember who gifted it to them.

Gifting money via check may also encourage the recipient to save the funds rather than spend them right away. They’ll have to visit a bank or use a mobile app to deposit or cash it, which may take a little more effort.

Tracing Important Payments

When making a large payment for something like a down payment on a new house, a college tuition payment, a deposit for a wedding venue, or even a payment to a government agency like the IRS, you may want to use a paper check. This can help ensure that your payment was received because you’ll be able to see when the other party deposits or cashes the check in your next bank statement or through your bank’s online portal. Some banks will even show you a photo of the cashed check so you can ensure it’s correct. This may even help prevent you from incurring any late fees since the transactions will all be dated.

Additionally, if your check is lost or stolen, you can request to cancel your payment through your bank’s customer service phone line or online via your bank’s website.

To place a stop payment on a check, you’ll need to select the “stop payment” option via your bank’s online portal—but you must do so before the check has been cashed. You may also need to enter the account number, the check number, and the amount of the check.

Keep in mind that you will likely have to pay a fee to stop a check. These fees vary from bank to bank, but you could end up paying around $30 to stop the check, and some banks may charge even more. 

If You’ve Been the Victim of Fraud

Has your sensitive financial information been compromised or stolen? You’re not alone. One study found that in 2018, 14.4 million people in the U.S. were victims of identity fraud to the tune of $3.4 billion in losses. Even worse, that same study found that more victims were forced to pay out of their own pocket to cover the cost of that fraud.

Given these numbers, it makes sense that you’d want to keep your information secure if you’ve already dealt with something similar. Many consumers go back to using paper checks or cash in lieu of swiping a debit or credit card at local retailers. They may also decline to enter their payment information online at retail websites or use online and digital payment services.

While writing a paper check isn’t a fail-safe strategy, keeping your sensitive information offline and swiping your credit card less may help decrease the instances of identity theft, fraud, and other financial crimes.

When to Skip Using a Check

You may want to skip writing a check for a few reasons. First, you may opt to give cash or initiate an online transfer if your recipient needs money immediately. Since checks usually take two to three business days to clear, other forms of payment are often faster. 

It might also be better to use an online bill payment app like Zelle or Venmo when you’re out with friends and splitting the dinner bill. It’s easy, pretty instantaneous, and a whole lot less time-consuming than writing and cashing a paper check.

If you’re a few days out from payday and don’t have enough money in your bank account to cover the funds you need, skip writing a check, too. It may be smarter to swipe your credit card and then pay it off when you have the money later that week.

This is because when you write a check, the funds are taken directly from the associated bank account. And if you don’t have enough money to cover the check, it could bounce, leading to penalties and fees with your bank. Additionally, if you write a check and then submit a stop payment to your bank, the check could be considered bad.

A bad check is one that cannot be cashed by the recipient because of insufficient funds or a stop payment on the check. Writing a bad check is actually illegal in some states, so be careful to only write good checks.

The Bottom Line

While using paper checks may scream old-school to you, don’t discount them entirely. There are some instances, such as when paying small businesses or paying your taxes, or even when trying to avoid identity theft, in which it’s perfectly acceptable to write a paper check. Consider all forms of payment to ensure you use the right ones at the right times.

Article Sources

  1. Visa. "Digital Transformation of SMBs: The Future of Commerce." Accessed March 2, 2020.

  2. Bank of America. "Bank Account Fees." Accessed March 2, 2020. 

  3. Javelin. "2019 Identity Fraud Study: Fraudsters Seek New Targets and Victims Bear the Brunt." Accessed March 2, 2020. 

  4. Consumer Financial Protection Bureau. "How Quickly Can I Get Money After I Deposit a Check Into my Checking Account? What Is a Deposit Hold?" Accessed March 2, 2020.