So if debit cards have instant access to money, are easier to use than checks, and can prevent you from spending money you don’t have, why do checks still exist?
Couple of reasons:
- Using a debit card typically means you need access to the internet to submit the transaction to the bank. No internet, no debit card. And, believe it or not, there are some places left on Earth with no internet! There used to be a way to at least use credit cards without the internet, but you’d be hard-pressed to find places with those devices nowadays.
- Setting up a debit card payment station can be expensive for a business! A lot of times, check depositing and cashing is included in a business’ checking account by default and for free. Using checks is therefore a much cheaper way to take non-cash payments for some businesses, so that’s what they go with. This is especially true for small businesses.
So, while they are not ideal, checks still serve a limited purpose in today’s economy and likely will continue to for a long time to come.
With that, we close our exploration of checking accounts. These are, of course, the absolute basics and there’s going to be more to learn, but you should have enough knowledge now to use a checking account wisely.
Next up: We’re going to talk about savings accounts and CDs (certificates of deposit). This is, to me, the more interesting stuff because we’re going to start talking about how your money can make money for you. You’re going to want to stick around.
Thanks for reading.
Common Cents 