“Paper Checks: Are They Still Relevant in Today’s Digital World?”

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What Are Paper Checks Used For?

Paper checks allow you to make purchases, pay bills, or pay someone using money from your checking account. In today’s digital age, with options like Apple Pay, Venmo, and online shopping, the necessity of paper checks might seem outdated. However, they still offer convenience for certain transactions. Let’s explore the pros and cons of paper checks and when they might be useful.

When to Use Paper Checks

According to the Federal Reserve Bank of Atlanta, paper checks accounted for just 3.8% of consumer transactions in 2022. Despite this, there are still scenarios where paper checks are beneficial:

• Paying someone without 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 or giving a card with cash or a gift card is risky. If lost or stolen, your gift is gone. A check can be stopped and reissued if lost.
• Paying school or extracurricular fees: Local parent-teacher associations or school fundraising organizations may not accept card payments.
• Setting up direct deposit: A blank, voided check is often required to initiate direct deposit for paychecks or benefits.
• Setting up automatic payments: A voided check can authorize automated transfers from your checking account.
• Making purchases without a card: If your debit card is lost or stolen, paper checks allow you to make purchases without carrying cash.
• Getting a written record of payment: A canceled check provides proof of payment, accessible anytime via your banking website or app.

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 postage
• Paper checks may take two days or more to clear
• Check amounts won’t be deducted until deposited, complicating balance tracking
• Lost or stolen checks can be used to steal money
• Recipients without bank accounts may face 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 or cash withdrawals.
• Peer-to-peer payment apps: Apps like PayPal, Venmo, and Zelle allow instant payments from a linked bank account or credit card.
• Automated clearing house (ACH) transfers: Schedule online payments from your bank’s website or mobile app.
• Wire transfers: Move money between banks quickly, often for a fee.
• Money orders: Used to send money when you don’t have a checking account.
• Certified checks: Verified by your bank, ensuring funds are available.
• Cashier’s checks: Guaranteed by the bank, used for major transactions.

Check It Out

Depending on your spending habits and tech-savviness, you may not need paper checks. Considering going all-digital? If you’re thinking about opening a new checking account, the Experian Smart Money™ Digital Checking Account & Debit Card can help you build credit without debt by automatically linking to Experian Boost®ø. You’ll also pay no monthly fees¶, have access to more than 55,000 fee-free ATMs worldwide**, and could receive your paychecks up to two days early when you enroll in direct deposit†. You can get an Experian Smart Money Account through a free or paid Experian membership, which also gives you access to your FICO® Score☉, Experian credit report, and more. See terms at experian.com/legal.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you with all your mortgage needs!

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