So, there’s this ancient process of sending money, without sending cash, through the mail – it’s called a writing a check. In the old days people wrote them at stores instead of using an Debit or Credit card. People used them to send birthday gifts (maybe you’ve even gotten one from your grandparents) or to pay bills, among other reasons.
While there aren’t as many uses for checks now, there still are some, and they are important to know about.
Businesses are where you will write most checks now a days. Many businesses don’t like credit cards because they are charged a fee for every transaction.
Depending upon the business they are in, it’s typically a set fee (under a dollar) plus a percentage of the transaction. You may find a company that doesn’t let you spend less than $5 or $10 if you use a credit card, like wise some companies will charge you a percentage of your purchase if you use a credit card. (This is illegal in some states, but not all – and funny, the government probably gave themselves a loophole so they can charge your for it.)
Because of this, many people need to have a check to start service where they are setting up a new utilities account, phone, cable, etc. So let’s see how you get checks, and how to use them.
When you opened your first checking account, you got the debit card that you wanted. But when you opened your account, the bank gave you a sleeve to hold your checkbook, your transaction register and your first batch of checks.
This was probably your first inclination to having a check. It might have been that pleasant little surprise, or something that you look at like a child with three eyes.
Depending upon your bank, your starter set of checks might be just a few (like ten), with a new set being mailed to you in the next week or so.
When you receive these checks, make sure all the information on them is correct. This includes your name, and address, which is the most common things to be wrong. Your bank name, routing number and account number will also be on the check. Your bank should have provided you with your account and routing numbers when you opened the account. While it’s rare for those to be wrong, since it comes from the bank, it’s good to verify.
Please note that just because you have checks, doesn’t mean that you have enough money for the purchase in your account. Be sure to check your account balance before writing any check. We’ll talk about how to make sure you’re only spending what you have in a minute.
Parts of a Check
On the far left of your check is your name and address. On the far right is your check number. Every check will have a different number. This is followed by a line for the date you are writing the check.
The next section is the person or business you are writing the check to. It will say Pay To The Order Of and is followed by a line where you write the name of the person or business you are paying.
At the end of the line you will see a box with a dollar sign. This is where you enter the amount of the check. Be sure to write the number using dollars and cents (i.e. $10.02). To make sure someone doesn’t come in and add an amount, I like to write a dash before and after the numbers so they can’t slip a one in front of my numbers. (i.e. $–10.02–) The bank knows you aren’t writing a negative number, so it’s OK.
Immediately below this section you will write out the amount of the check using words (i.e. ten and 02/100). The word dollars will be at the end of this line.
Now you should see the word “For”. On this line you write what the check was for. If you are paying a bill, you should write the account or invoice number on this line. The line immediately following this line is your signature line. Here you sign your name.
Your routing number is the first set of numbers at the very bottom of your check. Your account number immediately follows your routing number, usually following a : symbol and continues until you see a II symbol.
Once you write a check, make sure you record it in your checkbook’s transaction register. You can learn more about this in our Balancing Your Checkbook post.
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