What's the point of paying with a check?

milkytoast@kbin.social to Moving to: m/AskMbin!@kbin.social – 12 points –

isn't it like a debit card with extra steps? at a store I mean

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Merchants don’t have to pay processing fees for checks, which is why they may not accept credit cards, or require a minimum for a card, and/or may pass along the processing fee to the customer.

Like cash, there’s still costs associated with them. Someone has to record the checks and take them to the bank. But more importantly, checks have an even worse risk of fraud than credit cards. A business doesn’t know that the account has sufficient funds, is even an active account, or that the check writer is even the account holder (can check ID, but what about business checks?). They can call the bank and verify funds, which obviously is awkward and time consuming, or there are 3rd party check verification services, which have to be paid for monthly. And then if someone bounces a check, often banks charge a fee to the depositor for that.

As a business owner, who accepts checks and charges fees for credit cards, I’ll take a check from a trusted party any day over credit cards when they want to avoid the processing fee, but I still have their credit card on file in case the check bounces.

edit: Further, it is a royal pain in the ass to accept a credit card payment, then have someone dispute the charge as if their card was stolen. The amount of energy spent taking checks to the bank is nothing compared to the energy, effort, and documentation needed to prove to a credit card company that the charge was legitimate, so you actually get paid and not take a total loss.

Checks work for situations where you know and trust the customer, and can do things like have their CC on file. Less so for situations like casual retail or trade shows.

I thought credit card processing agreements tend to forbid charging an extra fee for using a credit card. Maybe that’s changed, idk.

See my edit, and you are very far behind. Years ago VISA and MC (at least) specifically made it legal to pass along fees. A short internet search should confirm this for you.

Yes, I did look it up. It’s more complex than that, though.

This site sums it up: https://www.lendingtree.com/credit-cards/articles/surcharges-and-convenience-fees/

good for you, my practices have been well vetted, so I’m not wasting my time reading it.

That’s great. You sound really awesome.

Sorry you take offense. I just didn’t provide a fully comprehensive reply, and don’t need someone who just learned about this to educate me on the subject.

It’s more for the benefit of anyone else reading who may be interested. I’m sure you know what you’re doing. I haven’t used traditional credit card services in a while (I ran a retail store and art business 2000-2012 or so).

So then you probably should have indicated that so I was aware of your intention, and either way your last reply wasn’t needed.

My original comment said "Maybe that’s changed, idk." Clearly this entire conversation wasn't needed.

Checks predate debit cards and e-transfers by at least a millenia.

Debit cards replaced cheques in the 1990s in advanced countries. Less advanced countries like the US had to wait until the 2010s.

Checks were unpopular in the US well before the 2010s and everyone had debit cards well before that.

Cheques were unpopular and the US was overly reliant on credit cards.

US debit card usage in 2010 was at least 15 years behind Canada. We had tap and chip cards before you guys even accepted debit cards. E.g. San Francisco's and Seattle's transit systems didn't even accept them at all until 2017. Vancouver accepted them some 20 years earlier.

Tap and chip didn't catch on until the 2010s for sure, but debit cards in general were everywhere in the US. They just had a barcode you swiped.

When I was young my mom would write a check for groceries on Wednesday and pray it didn't clear until my dad got paid Friday. So short term loan for food purpose?

Checks are completely phased out in NZ. You can't even get checkbooks here anymore.

so futuristic, what are the steps to get there?

Idk if they are phased out in my country, but I have never seen people using them (only in American movies, but not irl) or even talking about them, not even in the 90s. Using them it sound so archaic and ancient

Seeing a lot of "only idiot cavemen don't use debit cards", but in my case it's for cash security. If there is theft or fraud that money is not available until the bank decides my report is legitimate. With a credit card that's not the case. Where I can't use a credit card I use a check with some extra security info.

Money isn't taken out of the account until the cheque is cashed, for one.

Which makes it harder for people to keep track of their expenses. Which in turn is why "balancing the checkbook" used to be a regular chore for almost everyone and is now a chore for almost no one.

They existed before debit cards and mostly before credit cards became popular.

Anyone paying with a check voluntarily these days is just either extremely stubborn and stuck in their ways, or incredibly ignorant. There isn't a single reason I know to keep doing it.

Avoiding processing fees for using a credit or debit card is another reason, although those are becoming far less common.

Currently I only use my checkbook to look up my routing and account number for some online subscriptions so I don't have to remember to update the payment method when cards expire.

Sometimes people pay with checks when they're waiting for money to hit their account, like if it's a day before their payday, because businesses usually don't cash checks until the following day.

This is a bad practice and I do not recommend anyone do it.

They are a hangover from a time before debit cards existed

It’s kinda like that. More of a promissory note bc debit balances can be checked at the point of purchase. Easier to balance your account if you’re not able to use internet reliably too. They almost all have carbon copies for each check and a balance ledger.

I really only have them for big purchases. A lot of businesses added a ~2% fee for using cards on things over $1000. Which is more than I want to pay when I’m already dropping $10k on house repair or something.

its like a little paper contract, guaranteeing you will pay that amount.

that its paper means theres a physical record both parties get to keep.

It's a holdout from when your options were cheque or cash (debit cards hadn't been created yet). Cheque is the more secure option as its use can be cancelled/reported as fraud. Cash is just gone once handed over, so it can be stolen from you easily.

Most places won't accept cheques anymore. Mostly just grocery stores. (food is a necessity and the elderly don't like change)

It's interesting that that's the case in America because in the UK absolutely no shops accept cheques

It's becoming extremely uncommon, I've never actually seen one used, just signs at a few groceries listing cheques as an option.

yea I just saw some dude use one today, and none of the employees knew what to do lol

Some people arent setup for credit cards. Think swap meets and garage sales. Basically anyone who is selling stuff for a day or two.

Everyone can take a check.

In the US, checks are much worse than paying with a credit or debit card. It is much cheaper for a merchant to take checks than either type of card, so that is why they're usually used.

Also, the person in question might be very poor / bad with money and unable to get a credit or debit card.

If you can get checks, you can get a debit card and vice versa. Each just relies on having a checking account.