If your payment has been returned unpaid by your financial institution, we may charge a returned payment fee and any applicable late fees based on the terms and conditions of your Cardmember Agreement. Show
We may resubmit payments returned for insufficient or uncollected funds up to two additional times, unless your financial institution has specified the payment request cannot be re-presented. Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. Advertiser Disclosure Advertiser DisclosureCloseWe think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials. Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates. Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can. A returned check is the paper equivalent of a declined credit card.But while the worst result of a declined credit card might be a bit of embarrassment, a bounced check can have bigger consequences. Banks and the merchants generally can charge fees to handle returned checks, and you could even wind up in legal trouble. But there are steps you can take to remedy a bounced check. Here’s what you can do if you wrote a bad check or you received one — and how to avoid this situation in the future. Get the feeling of Instant Karma™ Learn More What is a returned check?Generally, a returned check is one that a bank declines to honor — typically because there’s not enough money in the check writer’s account to cover the amount of the payment. You might know this situation as a “bounced check,” while the bank calls it “nonsufficient funds,” or NSF. When might a check bounce?When you don’t have enough funds in your checking account to cover a check, then the check can bounce. This is typically an honest mistake. For example, you may have forgotten that you scheduled an automatic payment, or an expected deposit didn’t hit your account in time. There are other reasons a check might be returned. A financial institution may return the check if you ask the bank to stop payment, if the recipient tries to deposit it months after the date written on the front, or if you post-date a check. And if any critical information is missing on the check, such as a signature, the bank might reject it then, too. Some people might intentionally write a check despite knowing they don’t have sufficient funds in their account to cover it. This is generally against state law. What are some consequences of having a check returned?Whether you intended to write a bad check or not, having a check returned can cause you trouble. Here are some of the problems you may encounter. Bank penalties and consequencesYour bank may charge nonsufficient funds, or NSF, fees and take them directly out of your account, even if it causes your balance to dip below zero. NSF fees vary by bank, but a Bankrate survey found the average is around $33. The bank may also decide to close your account, which could hurt your chances of joining another bank or credit union. Charges from check recipientYou’ll also likely owe a returned check fee to the merchant or person who received the check. Depending on the state, the recipient may charge you between $20 and $50 or a percentage of the check amount, according to payment processing company VeriCheck. The payee may also take other action, such as suspending a service. Negative banking historyGenerally, financial institutions don’t report returned checks to the national credit reporting agencies. But they may report bounced checks to specialty reporting agencies, such as Early Warning Services and ChexSystems. These agencies specialize in checking information. Having a negative record with these agencies may make it harder for you to open a bank account in the future. Legal penaltiesYou might also find yourself in trouble with the law. In some states, intentionally writing a check without having the funds in your account could be considered a misdemeanor or a felony — and there are penalties. The details depend on local laws and the circumstances, such as the amount of the check and whether you eventually paid the money as agreed. Potential credit hitFinancial institutions usually don’t report bounced checks to credit bureaus such as Equifax, Experian and TransUnion. But the payee might. For example, if the check was for a loan payment, the lender may treat it as nonpayment and could eventually report the missed or late payment to the credit bureaus. The negative information on your credit reports may lower your credit scores. What should I do if I have a check returned?If you wrote a bad check, it’s important to act right away.
What should I do if I receive a bad check?The returned check could be an honest mistake — and in that case, it should be easy to sort out. But if you can’t get payment, the law is generally on your side. Here are some steps that may help you recover your money if you receive a bad check.
Next steps: Tips to avoid bouncing checksYou might not be able to do anything about a check that’s already bounced — except make good on the payment — but there are steps you can take to prevent this from happening in the future.
Get the feeling of Instant Karma™ Learn More About the author: Kim Porter is a writer and editor who has written for AARP the Magazine, Credit Karma, Reviewed.com, U.S. News & World Report, and more. Her favorite topics include maximizing credit card rewards and budgeting. Wh… Read more. What happens when a check bounces due to insufficient funds?When there are insufficient funds in an account, and a bank decides to bounce a check, it charges the account holder an NSF fee. If the bank accepts the check, but it makes the account negative, the bank charges an overdraft (OD) fee. If the account stays negative, the bank may charge an extended overdraft fee.
What to do if a check is returned for insufficient funds?Ask the check writer if it's safe to redeposit the bounced check. Or, you can contact the bank on which the check is drawn to see if funds were added in the account to cover the payment. Seek legal action. If you still haven't received payment, then you may need to take the check writer to court.
How many times will a bank run a returned check?Generally, a bank may attempt to deposit the check two or three times when there are insufficient funds in your account. However, there are no laws that determine how many times a check may be resubmitted, and there is no guarantee that the check will be resubmitted at all.
How long does it take for a check to be returned for insufficient funds?Federal law requires your bank to make the funds available to you within a certain amount of time, whether the funds actually arrived from the other bank or not. Checks typically take two to three business days to clear or bounce.
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