This is a guest post by Kasey Steinbrinck, who has spent more than seven years writing for multiple forms of media. He has worked in the television, newspaper and radio industries, but now spends his time blogging about personal checksand business checks for the online company Check Advantage. He also has first-hand experience with using his credit card too much. You can read more of Kasey’s writing at http://blog.checkadvantage.com/.
Paper or plastic? That’s a question you usually hear at the grocery store, but it’s also a decision you’ll have to make when it comes to payment options. Will you use a credit card, debit card, cash or a personal check?
You’ve probably heard the rumors that personal checks are on the “endangered species list” of ways to pay. However, according to the Federal Reserve, there are still more than 30-billion checks written in the U.S. every year.
Maybe you’ve been in line behind a little old lady when one of those 30-billion personal checks was being meticulously written out, but only after that nice little old lady dug through her gigantic purse to find a couple of coupons for 25-cents off.
Despite her lack of multi-tasking skills, those little old ladies all over the country may be teaching us a lesson in personal finance wisdom! (Not to mention – patience – which is a virtue by the way)
Here are five reasons why keeping personal checks around is still a good idea:
1. It’s Easier to Keep Track of Your Personal Finances
This is probably the biggest advantage of personal checks. Let’s be honest. When we all started using debit cards to make purchases, most of us stopped using our check registers.
Those little books with white and gray lines can be a very valuable tool. You’ll usually get one when you order new personal checks. Have you ever received one when your new debit card came in the mail? I haven’t.
Yes, it can be a pain to carry a register around so you can record every little payment. That’s why they make duplicate checks. You can always check out the carbonless copy when you get home and then balance your checkbook.
Personal check registers can help you stay within your budget. Sure, online banking is super convenient, but when you’re actually keeping track of things on your own with hard-copies, you’ll be much more aware of what’s in your account. Plus, sometimes banks make mistakes. You’re more likely to catch an error if you’re keeping track of things yourself.
2. Real People Don’t Accept Credit Cards
Visa isn’t quite “everywhere you want to be.”
One of the arguments against personal checks is that some vendors no longer accept them as payment. However, there are plenty of other situations in life when money will need to be exchanged and personal checks are ideal.
What happens when you need to pay the babysitter and you ran out cash on your date? Where do you plan on swiping your credit card? Careful with that one!
Imagine getting a birthday card from Grandma, and instead of a personal check she sent an IOU and a stick of gum.
What do you do when you’re heading to your cousin’s wedding and you’re picking up a card at the last minute, but you forgot to get a gift?
Let’s say your greasy overweight landlord is pounding on your door asking for the rent. I doubt he takes American Express. But if you give him a personal check and ask him to wait until Friday to cash it – you might be able to calm him down.
Personal checks can certainly come in handy from time to time!
3. You Can Get “Back to Basics”
The recent downturn in the U.S. economy has made the idea of getting “back to basics” something that’s both trendy and smart. The basic idea is to simplify your life.
That means not only thinking about how much you’re spending, and what you’re spending your money on, but also what you use to spend that hard-earned money.
Many Americans are finding themselves in some serious debt because they used credit cards and spent money they didn’t have. Then things head into a downward spiral when you can’t keep up.
When you got your first credit card someone probably told you something like “Use this for emergencies only!” But somewhere along the way, the convenience and speed of swiping a plastic card surpassed the concept of being responsible.
It’s so easy to flip your wrist, or punch in a pin number without really thinking about how much money you’re throwing around. On the other hand, when you go back to using personal checks, you are forced to write down the amount you’re spending. Using personal checks can open your eyes so that you see exactly how a particular purchase is going to affect your life.
4. Sometimes Being Slower is a Good Thing
Just ask the Tortoise how he managed to beat the Hare.
It’s no secret that checks take a little longer to process than an automatic payment you set up online or an electronic payment using a debit or credit card. But slowness can actually be an advantage.
Check 21 legislation became law in 2004. It allows banks and businesses to use electronic images and substitute checks as a legal form of payment. That’s made check processing much faster and more efficient. Yet it still takes one or two days for the typical check to go through.
Now let’s say your purse is stolen (heaven forbid), and your checkbook and debit card are inside. That nasty thief could drain your checking account while swiping your debit card all over town. If you don’t report your card stolen immediately, you’re probably going to be held accountable for the money that was spent during that time period.
If that purse-snatcher tries to use your personal checks, you have more time to cancel those stolen checks before they are actually processed. This way there is no charge to you.
5. You Can Express Your Personality
It may not be the most useful benefit of using personal checks, but it’s definitely a fun reason to keep them in your pocketbook.
We love to personalize and customize just about everything we own. From personalized license plates to monogrammed bath towels, MySpace layouts and cell phones, everyone wants to be an individual.
Personal checks have been ahead of the game on this for a long time. There is literally an endless supply of styles you can choose from if you decide to order personal checks online.
There are checks for people who are animal lovers, outdoor enthusiasts, sports fans and more. You can order personal checks featuring your favorite cartoon character, or even have family photos printed on the checks.
Some credit card companies have tried to jump on the personalization bandwagon, but it just isn’t the same. Not many people really get to see your credit card. But you’re handing personal checks to people all the time. They can be great conversation starters. Who knows! You could meet the love of your life because of your taste in personal checks. (Ok, that’s pushing it)
What Do You Think?
It’s probably pretty unrealistic to think we can all get rid of our plastic payment options and use personal checks exclusively. However, should we keep them around or not?
I’m sure there are plenty of people with opinions about the future of personal checks. Let’s hear what the readers of Financially Poor think about the topic. Leave a comment and let us know!