A bad check is written on an account with insufficient funds, resulting in the check bouncing and the bank not honoring it. It is considered fraud and can result in fines or imprisonment. Overdraft fees are charged, and keeping a buffer or careful record-keeping can prevent writing bad checks.
A bad check, also known as a bad check or rubber check, refers to a check that is written on a checking account that does not have sufficient funds to cover it. The check is returned and marked “insufficient funds,” and the check “bounces,” meaning the bank doesn’t honor the check. Writing a bad check is a crime and can be considered a misdemeanor or even a felony, depending on the amount of the check, how often bad checks have been written, and one’s criminal history.
Writing a bad check is considered a form of fraud. Banks can press charges on the first offense, although this practice is somewhat rare. It can be considered a federal crime, punishable by hefty fines or a prison sentence. However, even if none of this happens, writing bad checks can cost the account holder a lot of money in overdraft fees, not to mention a damaged reputation.
Overdraft fees are fees charged to the account holder after he or she writes a bad check. Each check written with insufficient funds in the account will be charged an overdraft fee; This fee typically ranges from $30 US Dollars (USD) to $50 US Dollars, but varies at different financial institutions. As these overdraft fees are charged to the account, the account balance will continue to decrease, which could cause even more checks to bounce. This can cause fees and bounced checks to increase exponentially.
There are ways to avoid writing a bad check on a checking account. Some people find that keeping a checking account “buffer” can help them stay within limits. For example, one could keep an additional $1,000 USD in the checking account, but not write this amount in the checkbook. Then, even if the funds in the checkbook fall below the balance, there will be an additional $1,000 to prevent bounced checks.
Of course, the best way to avoid writing a bad check is to keep careful records of one’s checking account. Be sure to write down every deposit and withdrawal, including ATM withdrawals or automatic withdrawals to pay bills. It’s easy to call the bank, or check online, to get an exact account balance if you’re not sure. Then, when the bank statement arrives each month, sit down and review it, matching the checkbook balance to the statement to make sure there are no transposition or other errors.
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