What does bounced checks mean

But your account balance would go negative, and you would probably be charged an overdraft fee to compensate your bank for the inconvenience. Another option is to have a backup account, such as savings or a line of credit, from which funds could be transferred to your checking account if an overdraft occurs.

Some banks and credit unions charge transfer fees for this option, but the fees are usually much less than overdraft charges. If the check is returned to a business, it may also add on some charges. Read our primer on how to avoid overdraft fees. In addition to the fees directly related to bounced checks, there can be other problems. If you bounced your check with a merchant, you may be listed in a database maintained by TeleCheck, a check acceptance company.

It screens transaction histories to weed out people with a history of fraud or bounced checks. If you don't pay the amount of a bounced check within the time frame your bank specifies, it can close your account.

Then, you could end up on the database of another reporting agency, ChexSystems. Many banks use ChexSystems to screen people who apply for new bank accounts, so getting written up can affect your chances of opening a new bank account.

Reach out to your bank and the check recipient: If you bounce a check, contact your bank and the person or company that received your check as soon as you're aware of the mistake. Explain your situation as a way of showing your good intentions. National Check Fraud Center. First Data TeleCheck. Checking Accounts. Credit Cards. Your Privacy Rights.

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