Here’s What Really Happens When You Bounce A Check

Bouncing a check can, first and foremost, lead to hefty fees. Depending on how your bank handles the charge, and the individual overdraft option you’ve selected for your account, you can be charged either an overdraft fee or a nonsufficient funds (NSF) fee. Overdraft fees are charged if your bank temporarily covers/pays your check amount, which thereby overdraws your account. Most banks offer you the option to select overdraft coverage. According to Bankrate, 91% of surveyed checking accounts in 2023 have overdraft fee policies. NSF fees, on the other hand, are charged if the bank decides to decline the payment altogether and essentially charge you a punitive fee for the process (this is slightly less common, with 70% of checking accounts holding this policy).

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Average overdraft fees in 2023 were $26.61, which is actually a reduction compared to previous years but can still be a significant financial blow for many. The average NSF fee is slightly less at $19.94, but these specific fees can ultimately be indicative of additional fees from the payee that did not receive their promised funds. Most utilities, lenders, and other bill collectors will charge a late fee if your payment is not made on time. Plus, these penalties can be even worse if you are a new client or a repeat offender compared to established customers with excellent payment histories. It’s important to realize that repeated bounced checks can lead your bank to eventually freeze or even close your account.

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