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Understanding the Use of Paper Checks

In today’s digital age, the use of paper checks has significantly declined. However, there are still scenarios where paper checks can be beneficial. This article explores the various uses, pros, and cons of paper checks, and presents some alternatives.

What Are Paper Checks Used For?

Despite the rise of digital payment methods, paper checks still have their place. According to the Federal Reserve Bank of Atlanta, paper checks accounted for just 3.8% of consumer transactions in 2022. Here are some situations where you might still use paper checks:

• Paying someone without using a payment app: If a friend doesn’t use apps like PayPal or Venmo, a paper check is more secure than cash.
• Paying certain businesses or organizations: Some small businesses or charitable organizations may not accept debit or credit card payments.
• Gifting money: Mailing a check is safer than sending cash or gift cards, which can be lost or stolen.
• Paying school or extracurricular fees: Local organizations may not be set up to accept card payments.
• Setting up direct deposit: A blank, voided check provides all necessary information for direct deposit setup.
• Setting up automatic payments: A voided check can authorize automated transfers from your checking account.
• Making a purchase without a debit or credit card: If your card is lost or stolen, paper checks can be a backup.
• Getting a written record of your payment: A canceled check serves as proof of payment.

Pros and Cons of Using Paper Checks

When deciding whether to use paper checks, consider the following pros and cons:

Pros of Using Paper Checks

• Gift money without a peer-to-peer payment app.
• Pay for goods and services when other methods aren’t accepted.
• Obtain easily accessible proof of payment.
• Can be deposited via mobile app without visiting a bank or ATM.
• Safer than carrying cash or gift cards.
• No computer or smartphone required to write or cash a check.

Cons of Using Paper Checks

• Banks typically charge extra for paper checks.
• Writing and recording checks can be time-consuming.
• Mailing checks requires paying for postage.
• Paper checks may take two days or more to clear.
• Check amounts won’t be deducted until deposited, making balance tracking harder.
• Lost or stolen checks can be used to steal money.
• Recipients without bank accounts may have to pay fees to cash a check.

Alternatives to Paper Checks

While paper checks have their uses, there are faster and more secure alternatives:

• Debit cards: Access funds from your checking account for purchases and online payments.
• Peer-to-peer payment apps: Apps like PayPal, Venmo, and Zelle allow instant payments.
• Automated clearing house (ACH) transfers: Schedule online payments from your bank’s website or app.
• Wire transfers: Move money between banks quickly, often for a fee.
• Money orders: Purchase from banks, post offices, and retailers for a small fee.
• Certified checks: Available from your bank, offering more security than personal checks.
• Cashier’s checks: Used for major transactions, guaranteed by the issuing bank.

Contact O1ne Mortgage for Your Mortgage Needs

If you have any mortgage service needs, O1ne Mortgage is here to help. Call us at 213-732-3074 to speak with one of our expert loan salespersons. We are committed to providing you with the best service possible.

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