What Is a Return Check Fee on a Credit Card

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A lot can happen between the time you mail the check for your credit card payment and when the credit card issuer takes the check to the bank. Unexpected expenses or accounting errors can drain your bank account and leave you without enough money to cover your credit card payment. If your check is returned by your bank, the payment won't be applied to your account and your credit card issuer will charge a returned check fee as a penalty.

Why Was Your Payment Returned?

There are a few reasons your payment could be returned by your bank. Insufficient funds, account closure, or check cancellation are a few situations that could explain why your payment was returned.

If you accidentally enter your payment information incorrectly, when you pay your credit card online or by phone, the payment will not process correctly and you could be charged a returned check fee.

How Much is the Return Check Fee?

Your credit card issuer may charge up to $25 for the first returned check within a six month period, and $35 for each subsequent returned payment. If you've missed a payment or had another returned check within the past six months, your credit card issuer may also enact the penalty rate, which is the highest rate charged on your credit card. Check your credit card terms for the exact fee and penalties for returned payments with your credit card.

Tips for Avoiding a Return Check Fee

You can avoid a return check fee by ensuring that you have enough money in your checking account to cover the payment. Be sure you've balanced your checkbook to consider any transactions that may clear your account in the next few days. You risk incurring a return check fee if you're trying to float checks or pay bills in a certain order because you can't afford to pay everything. Unfortunately, you may also face an insufficient funds fee from your bank as well.

Monitor your checking account closely after you've mailed your credit card payment to make sure your balance can cover the payment when it's presented.

When you're paying online via the credit card issuer's website, verify that you've entered all the information correctly, even if it means pulling out a physical check to confirm your checking account information. Your card issuer might suspend your account for a few months in addition to charging you a fee.

You may be able to have the fee waived or reversed if it was a one-time incident and your account history has always been positive. Call the customer service number on the back of your credit card, explain the situation, and ask that the fee be waived as a courtesy.

How the Returned Payment Will Affect Your Credit

The returned payment may not go on your credit report if you make up the payment within 30 days of the due date. Thankfully, your credit score won't be impacted because of this mistake. However, if a full 30 days passes after your due date and you haven't successfully made the payment, a 30-day late will go on your credit report and could impact your credit score.

Make a habit of verifying that your payments have cleared a few days after you make them. This will help you respond quickly if there is an issue with your payment and, if you can't avoid the return check fee, maybe you can at least save your credit.