Consequences of Bouncing a Check

If you write a bad check...

1. Each bad check might cost you a fee of $10 to $30.

2. Additional checks you have written may not be paid.

3. Your negative activity can be reported to account verification companies like ChexSystems and TeleCheck. This can make it difficult to cash checks and to open accounts in the future. (continued below)

4. Your bank also can close your account and send a negative report to the credit bureaus. The amount of the overdraft and fees might be reported as a collection item.

5. Some states have additional consequences. Writing a bad check is a crime in every state. Each state has different civil and criminal penalties. For example, some states have monetary penalties, such as $1,500 fine. Others may actually call for jail time and a fine. In some states, writing a bad check is a felony with imprisonment for up to five years.

Protect Yourself Against Writing Bad Checks

Not having the money in your checking account to pay the check you wrote is called an overdraft. Most banks offer overdraft protection, or bounce protection.  When you sign up for overdraft protection, the bank will use the money from another one of your accounts to cover the transactions if you don't have enough money in your checking account. Keep in mind, overdraft protection is different than bounce protection.

Although overdraft protection is not free, it usually costs much less than paying an overdraft fee. Ask your bank for specifics about the overdraft protection they have to offer.

Many credit unions will automatically transfer funds from your savings account to checking to avoid a returned check.  The fee for this is much lower than for a bad check so it's definitely worth checking this possibility.