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What happens to my check if I write a check for more money than I have in my account?

It’s really important to know the answer to this question because writing a check for money you don’t have in your checking account can cost you a lot of money. And if you do it too often, you can go to jail. 

For most people, there are two possibilities if you write a check for money you don’t have in your account: 

1)    Your check will “bounce”—meaning the bank will not pay your check. When this happens:

  • Your bank charges you a fee for the bounced check—probably $20–$40. That’s a lot of money! And if more than one of your checks bounces, you’ll be charged the fee for each bounced check. Bounced check fees can really add up fast if that happens!
  • Then your bank returns the check to whoever you wrote the check to and lets that person or business know that you had “insufficient funds” to cover the check.  That’s not only embarrassing, but it gives you a bad reputation. And, the bank you deposited the check in will charge a fee to the account where the check was deposited. They, in time, will add this to the amount you owe them.
  • If your bounced check is returned to a business, the business will contact you for re-payment and probably add a returned check fee to total.  Those return check fees can be $25 or more.
  • The business or person you wrote the check to can send your bounced check to your bank again.  And if you still don’t have money to cover the check, your bank will charge you another bounced check fee.  Each time that bounced check is sent to your bank and you don’t have money to cover it, you’ll be charged another bounced check fee.   

The important message here is don’t write checks for more money than what is in your account. If you accidentally write a check for more money than you have, contact the person you wrote the check to and try to settle the mistake ASAP. 

Since bouncing checks is illegal, if you write too many checks for money you don’t have in your account, you can be arrested. Talk about expensive—there are bail fees, attorney fees, court fees, fines for illegal behavior and you’ll still need to pay all those bounced check fees along with the money you owe to whoever you wrote the checks to in the first place. 

2)    The second option for covering the cost of a check when you don’t have enough money in your account is known as “overdraft protection.” If your checking account has “overdraft protection” the bank will “automatically” pay the check and treat it as a loan you must repay with interest. You’ll also be charged an overdraft fee which can range from a couple bucks to more than $20. Every time one of your checks is paid by “overdraft protection” you’ll be charged the overdraft fee (for example, $3) and the amount will be added to your loan balance.  Interest on overdraft protection loans is similar to credit card rates—something like 18-20%. If you didn’t have the money to pay the checks you wrote, how will you repay the overdraft protection loan? Although this is a better option than having a check bounce, it will still cost you a lot of money. And, if your checks total more than the amount of your “overdraft protection,” your bank will probably start bouncing any additional checks written. 

Check with your bank or credit union to see if you can add “overdraft protection” to your checking account. It will probably save you some money for an accidentally bounced check and will help maintain your reputation. And, even though it costs money, it is much cheaper than bounced checks.

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