A bad check, also referred to as a bounced check or a rubber check, refers to a check that is written on a checking account that does not have sufficient funds to cover it. The check is then returned and marked "insufficient funds," and the check "bounces," meaning the bank does not pay out on the check. Writing a bad check is a crime, and can be considered a misdemeanor or even a felony depending on the amount of the check, the frequency with which bad checks have been written, and one's criminal history.
Writing a bad check is considered to be a form of fraud. Banks may press charges at the first offense, though this practice is somewhat rare. It can be considered a federal offense, which may be punishable with sizable fines or a sentence in prison. Even if none of these things happen, though, writing bad checks can still cost the account holder a great deal of money in overdraft fees, not to mention a damaged reputation.
Overdraft fees are fees charged to the account holder after he or she writes a bad check. Each check that is written with insufficient funds in the account will be charged an overdraft fee; this fee generally ranges from $30 US Dollars (USD) to $50 USD, but it varies in different financial institutions. As these overdraft fees are charged on the account, the account balance will continue to decrease, potentially causing even more checks to bounce. This can cause fees and bad checks to exponentially increase.
There are ways to prevent writing a bad check on a checking account. Some people find that keeping a "buffer" in the checking account can help them to stay within the limits. For instance, one might keep an extra $1,000 USD in the checking account, but not write this amount in the checkbook. Then, even if funds in the checkbook dip below the balance, there will still be that extra $1,000 USD to prevent checks from bouncing.
Of course, the best way to prevent writing a bad check is to keep a careful record of one's checking account. Be sure to write down every deposit and withdrawal, including ATM withdrawals or automatic debits for paying bills. It is easy to call the bank, or check online, to get an accurate account balance if one is unsure. Then, when the bank statement comes every month, sit down and look it over, matching the checkbook balance up to the statement to be sure there are no transposition errors or other mistakes.
