Quick take: The pros and cons of writing checks (2024)

FAQs

Quick take: The pros and cons of writing checks? ›

Paying with checks in B2B transactions has its set of advantages, including security, record-keeping, and cost-effectiveness. However, the disadvantages such as processing delays and physical security risks cannot be overlooked.

Paying with checks in B2B transactions has its set of advantages, including security, record-keeping, and cost-effectiveness. However, the disadvantages such as processing delays and physical security risks cannot be overlooked.

Improved Security: While checks aren't bulletproof when it comes to safety, they are a step up from using cash. Importantly, paying with checks creates a paper trail that serves as proof of payment. In addition, anyone can use cash that's intercepted. But it's much harder (and riskier) to cash someone else's check.

Pros of Paper Checks

Paper checks offer more privacy for employees who would rather not share their bank account information with their employer. By keeping their bank information private, employees have more control over who is allowed access to their information and account.

Security. Checks are a relatively secure form of payment. They are difficult to counterfeit and can be traced back to the issuer, making them safer than cash or credit cards. Cost: Checks are a cost-effective way to make payments.

It is more convenient and safer to carry around than cash. It is a negotiable instrument that can be endorsed in favour of a third party. They can be easily traced if lost.

Paying bills with checks typically requires manual processing, which exponentially increases the risk of errors. Mistakes such as double payments, incorrect amounts, or missed deadlines that can result in late fees, penalties, or even legal action.

Although you can pay from your checking account without paper checks, they can be useful in situations such as gifting money, paying companies that don't accept card or digital payments, or making a purchase without your debit card.

What are the disadvantages of using paper checks? ›

Paper is a security risk.

From the name, address and phone number to the bank and authorized signature. Criminals can use the account and routing numbers to make online purchases, and checks are also easy marks for counterfeiters.

How Long Are Personal Checks Legally Valid? Typically, personal checks are good for six months (or 180 days) from when they're dated. After that, they're considered "stale." Legally, banks and credit unions are not obligated to accept stale checks. However, some banks do accept checks older than six months.

Checks can be used to make bill payments, as gifts, or to transfer sums between two people or entities. They are generally seen as a more secure way of transferring money than cash, especially with large sums.

One of the primary disadvantages is it can be easy to overdraft an account without careful balancing of your checkbook. If you bounce a check, you can face a fee from your bank as well as the check recipient. Merchants do not always take checks.

Many people also still use checks instead of cash to give monetary gifts. It's a more secure form of payment, especially if mailing a card. In addition, it's more convenient for the recipient since they can use a mobile check deposit feature on their smartphone to immediately add the funds to their bank account.

Caution with high-value personal checks

While you can deposit checks over $10,000 at any bank or ATM, cashing this requires the bank to report it to the Internal Revenue Service (IRS), a rule for all cash transactions over $10,000.

The primary benefit of checking accounts is the ability to store money you intend on spending, either through debit card transactions, checks, or cash withdrawals. However, the downside is they typically don't pay interest.

Accountability Issues: Although the system of checks and balances is designed to ensure accountability within the US government, it can sometimes lead to confusion over responsibility and blame, making it difficult to hold specific actors accountable for their actions.