Fees and Expenses For Bad Checks
Bad checks can cost you money that you don’t have. You may have to pay a bad check fee to a business you wrote the check to (typically around $25). In addition, they may refuse to take your checks going forward.
Your bank might also charge a fee for bad checks. They can return the check to a business unpaid, and ding you with a bounced check fee (often around $35 or so). However, your bank might decide to pay the check as a ‘courtesy’ and charge overdraft fees (again, often around $35, or they may call it a loan and charge you interest).
A Bad Check Database
Another risk is that you’ll end up in a database of people who write bad checks. Banks won’t allow you to open a checking account, and some merchants might not accept checks from you. ChexSystems is just one company that tracks bad checks.
Bad Checks and the Law
Writing bad checks can be a felony. Each state has different laws, limits, and procedures, but you should know that you can end up in jail for writing a bad check. After that you still may have to deal with legal fees, mandatory education programs, and a tarnished criminal record.
How Bad Checks Affect Credit
Bad checks don’t show up on your traditional credit reports. However, companies like ChexSystems keep a record of your banking activity.
If you do not have a solid credit history, lenders, employers, and insurers may look at alternative credit rating agencies to decide whether or not to do business with you. Those agencies may include information about bad checks, which will hurt your chances.
Finally, a business that you write bad checks to might send your account to a collection agency. If that agency reports activity to the major credit bureaus, your traditional credit scores will suffer.