Pitfalls of Checking Accounts

1.  Keep your blank checks safe.  If someone steals your checks and forges your signature, you are usually not liable, but if you were negligent in your care, you may not be able to recover your funds.

2.  Make sure you have sufficient money deposited into your account soon enough to cover all of the checks you write.  Be aware that some funds cannot be withdrawn for one or more days.

3.  If possible, have a backup system in place such as an overdraft protection line of credit to protect you in case you or someone else (e.g. payroll clerk) makes an error.

4.  Avoid bouncing checks! A person who issues a check “knowing it will not be paid… if he fails to make [it] good…” may be guilty of a felony.  Returned check fees can be very costly.  Example: When a check for $10 was returned, both the bank and the merchant charged a $20 returned check fee.  The person ended up paying $50 for a $10 pizza.  When payment is not made within 7 days of a written notice of intent to file civil action, costs of collection including attorney fees may be added.   Such a pizza could end up costing $200.