What Is a Bounced Check?

What is a bounced check?

A bounced check is a check that a bank can’t process because there’s not enough money in the checking account to cover it. Although having insufficient funds is a common reason for bounced checks, checks could also bounce if they’re incorrectly dated or there’s missing information.

When a bank can’t process a check, it “bounces” the check back to the person who tried to cash it (aka, the payee). 

In many cases, people aren’t out there bouncing checks on purpose. They may not realize their account balance is running low. Maybe a deposit they were expecting has been delayed, so there’s not as much money in the account as they thought. And as we mentioned earlier, there are other innocent mistakes that could lead to bounced checks, like a missing signature. 

Potential fees and penalties for bounced checks

A bounced check could result in fees and penalties. Banks will typically charge a nonsufficient fund fee for bounced checks (kind of like an overdraft fee). 

How much are we talking about? It could be around $35, though it varies from bank to bank. 

But bank fees aren’t the only thing you might have to deal with. The person or business you wrote the check to could also charge a fee. 

Now, if the person is a friend, you may just get a good roasting (and never hear the end of it). A business, on the other hand, probably won’t be as forgiving – they could charge a fee for the trouble of having to redeposit the check. 

Accidentally bouncing a check once or twice can happen to anyone. But if it becomes a habit, you might face penalties from your bank as well as the places where you shop, which could affect your check-writing privileges and ability to maintain a bank account. 

For instance, a bank may decide to freeze or even close out your account completely. Retailers may report you to a consumer reporting agency like ChexSystems or Telecheck and refuse to accept check payments from you in the future. If your name ends up in one of the consumer databases, you may also find yourself having trouble opening a bank account down the road.  

Do bounced checks affect your credit?

The short answer: Yes, they can. While bounced checks don’t show up directly on your credit reports, late and delinquent payments do. And those could impact your creditworthiness. 

Think about it – if you write a check for a loan payment and it bounces, that means the payment never went through. Your lender can then report the missed or late payment to the credit bureaus, which, in turn, could lower your credit score.  

Is it a crime to bounce a check?

While each state has its own laws for dealing with bounced checks, knowingly writing bad checks is illegal. Civil and criminal penalties will depend, in part, on the amount of the bounced check(s) and whether you’re a repeat offender. 

Tips to avoid bouncing a check

This one may be obvious, but as you’re writing your check, make sure you’re filling it out correctly (and legibly!) – such as the payee information, date, amount and signature. 

Other tips to consider:

Pay attention to your checking account balance. If you’re old-school, then you know the subtle joys of balancing your checkbook. This is where you write down every single deposit and debit from your checking account, so that you know your balance at all times. This process definitely requires a bit more math and discipline on your part. 

Another (perhaps more straightforward) option: Log in to your online account regularly to check your balance. Yes, it can be that easy! If available, you could also set up a low-balance alert, so you know when your account is running low and can put more money into it. 

When you look at your available balance online, you’ll also want to be mindful of any upcoming automatic or recurring payments that haven’t been processed yet. Sometimes we may forget there’s a charge coming up that we’ll need to have enough funds in the account to cover. 

Check your bank’s overdraft protection options. Some banks offer overdraft protection. For instance, you may be able to link your savings account to your checking account. That way if there’s not enough money in your checking account to cover a payment, your savings account could back you up. You may also be able to sign up for an overdraft line of credit. Talk to your bank representative to see what options are available.