New Check Cashing Policy Now in Place
Ideally a check should not be written unless the required funds are already in place to cover the expenditure. Unfortunately for many people, the flow of funds in and out of a checking account, becomes a juggling act, in an attempt to balance the tight budgets of countless checking account holders.
With the newest change in check cashing policies, that began last Friday, the cushion will no longer be there, in most cases.
The latest change is based on "back office conversion". In the past, the checks would be taken to the back office, hence the name, and then in a daily or weekly trip to the bank, deposited to the store or business account. This gave the customer a grace period, in order to cover the necessary funds needed to make the purchase. With the advent of electronic payments, the checks will clear and post to your checking account using a much faster process.
What would have taken days to appear as a debit on your account, will now be done much more quickly. The funds will be withdrawn as soon as anytime the same day to no later than overnight. This means that funds will be withdrawn from your account and this includes weekends, so no more "float" time between a purchase and payment.
This is good news for the retailers, wanting to get their funds in a more timely fashion, and the bigger retailers are most likely to be the first to jump on this particular bandwagon. By reducing their wait time and costs in processing the funds, some may be more likely to accept checks as payment.
For the consumer; however, the float time reduction may begin to make the use of debit cards more of a feasible option, rather than carrying around a checkbook. Many banks do not even return the checks to their customers anymore, and with the loss of "float" time, many bank customers may opt more and more, to switch to online, electronic, credit card, and debit card banking to make purchases and pay bills.
Published by Laurie Meekis
I am very pleased to have earned the top 1,000 content producers badge three years in a row on Associated Content. Many of my articles and writings here are available for reprint. For those and other writin... View profile
- Life After Chex Systems: How to Open a New Checking AccountThis article explains how to deal with being reported to Chex Systems after an unexpected error causes your checking account to be closed. It also explains how to regain your dignity by opening and properly managing a...
- Not Able to Open a Checking Account? Consider These OptionsEverybody knows that an irresponsible credit history can keep you from being able to buy a house, buy a car or obtain many types of loans but are you aware that bad checks and unpaid bank fees can prevent you from bei...
- Can I Close an Overdrawn Checking Account? Learn why it's not possible to close an overdrawn checking account, and how you can dig yourself out of an overdraft.
- Three Things to Watch for when Choosing a Bank Checking AccountWhen I turned 18, I always knew I was going to be financially-wise, however, that all turned upside down the day I opened a Bank of America account. So here is three things to consider the next time you are wanting to...
- Is Your Child Old Enough for Their Own Checking Account?Deciding when your teen is ready to open a checking account can be a difficult decision but can also teach them how to become a financially responsible adult.
- You Can Use Direct Depost, Even Without a Checking Account
- Can Kids Have a Checking Account?
- How to Protect Your Checking Account When Shopping Online
- PayPal Fraud Drained My Checking Account!
- Checking Account Fees Add Up
- ING Direct's Electric Orange Paperless Checking Account Has Landed!
- Banking Reviews: ING's Electric Orange Checking Account
10 Comments
Post a CommentBummer.
Great article! Guess we need to start balancing the checkbook more and stop trying to "beat it to the bank"
LOL I AM a starving writer Susan. Thank you for the comments all.
Great article. I was already aware of these new check cashing policies, but you present the info in a well written and an easy to understand manner. The thing I find most ironic is that I may lose the grace period between the day of writing the check and the day funds are removed from my account, but the bank has kept their grace period that allows them a few days between the day my husband's pay check is direct deposited and the day they actually allow us to use those funds.
I hadn't heard about this. Fortunately, at this time in my life, I am not in that situation, but I can remember living "hand to mouth" for long periods of time. If I weren't married, I'd be considered a starving writer...
Good info, thank you. I know Wal-Mart here does the automatic check posting thing now. I have only 1 time had to mail a check, but I knew the money would be there 2 days later and it would take 4 days for the electric bill to process. That's when I found out they will take half payments as long as I paid within the next 2 weeks. I still to that now if it's an outrageous bill.
I don't write checks but I know some have been burned by floating. good info
Enacted this in Louisiana a few years ago-got stung later when i forgot about it and attempted to float a check--good article
I must admit, I have had to use the "float" time many times, but this is just a matter of rethinking procedure and managing funs more efficiently. Think about how we recieve payment on AC. It is a cashless procedure and the ease of it is what made part of this AC venture possible. I think part of the fear of a cashless society is the fear of losing control and electronic mistakes that are more difficult to prove from the consumers end. With paper checks the proof is right in our hands. Sometimes companies will still not accept electronic proof and want physical copies of checks to prove payment, so they need to redo their thinking too. The distrust of the new system runs on both sides of the fence at times, consumer and business.
I've been tracking this "evolvement" in the electronic financial transaction processing industry for about four years now. I was in the business for awhile. You should hear the fury that ensues from people fearful of the "cashless society" of the end days! I'm just anxious for check deposits to post instantly! Good Topic. Great article.