Are Checkbooks Really Going Extinct?

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May 15, 2014 by Lisa Brammer

It’s true, fewer and fewer people are writing checks each year—including me. I remember when I opened my first checking account back when I was in high school. I felt so grownup and thought it was so cool to see my name and address printed on each check. It held a prominent spot in my purse so I could easily access it to make a purchase or pay a bill. Now, fast-forward about a gazillion years and it can be found catching dust thrown in the bottom of my desk drawer, only used when necessary.

I remember when debit cards came out. At first, my husband and I thought they were great. But, having two debit cards for one account had its challenges back before the days of internet banking. And yeah, we used our debit cards, at least my husband did (because I was in possession of the checkbook) but when it was time to pay our monthly bills, the checkbook was always there, front and center.

Now that there are so many other more convenient ways to pay by electronically transferring funds using online bill-pay, payment apps, and debit cards, old paper checks are more often than not left behind. According to a study by GOBankingRates, 38 percent of those surveyed said they never write checks, 26 percent said they write checks several times a month, a little more than 20 percent said they only write checks a few times per year, and 16 percent said they write checks only once a month.

The study also found:

• Men (43.4 percent) are more likely than women (32.7) to never write checks.
• The youngest demographic polled, 18-24, were most likely to never write checks
(61 percent).
• Westerners were more likely than people in any other region to never write checks.
• 47.6% of those making $100,000-$149,999 and 46.3% of those making $0-$24,999 reported never writing checks.
• Every single respondent polled making $150,000 or more reported writing checks several times a month.
• Older respondents, 55-64, were more likely to write checks several times a month.
• People living in rural settings were more likely to write checks several times a month than those in suburban or urban locations.

Writing checks is not just falling out of favor, accepting them is also on the decline. There used to be a time when just about everyone would accept a check, now there are “No Checks!” signs hung prominently at many establishments.

Nevertheless, some people do still want or need to use paper checks. Many apartment complexes and landlords are unwilling to accept cash or credit/debit cards. In these cases, the renter must either pay with a check or go through the hassle of obtaining a money order. In other cases, online bill pay options may charge convenience fees some are unwilling to pay, making check-writing a more economical choice.

According to the Federal Reserve’s latest 2013 Federal Research Payment Study paper check writing is on the decline, but continues to be an important part of the payment system and experts predict that soon check volume will stabilize.

Checks may still be written old-school, but the FR study found that virtually all are processed and cleared electronically. Gone are the good-old-days when you could write a check knowing you had up to several days of “float” time to get money in your account before the check presented at your bank.

Since paying by check represents about 15 percent of non-cash transactions and general purpose debit transactions makes up more than 36 percent, I’m thinking calling your account a “checking” account is almost like saying you’re “dialing” a phone.

Founded in 1950, United Credit Service, Inc. is a full service revenue cycle management and debt collection agency in Wisconsin providing highly effective, customized one on one management and recovery solutions for our business partners. We offer pre-service collection solutions as well as traditional back-end collections. Visit our website at http://www.unitedcreditservice.com or call 877-723-2902.

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