“My bank says I bounced three checks! But I know for absolutely sure I had enough money in my account to clear them. Now I’m being charged bounced check fees. What happened?”
This may sound impossible but you too could get lured into this common trap! Oddly enough, it has little to do with your actual checkbook balance. So let’s explore why this happens and how to prevent it!
Debit cards are the culprit — when using them to buy gasoline. You see, many people use their debit cards at the pump but run them as credit cards. That’s because they don’t take the time to enter their pin number. A funny thing happens when using a debit card as a credit card to buy gasoline. When you swipe your card, the oil company “reserves” enough money in your checking account to pay for a “typical” fill-up, since the pay-at-the-pump machine can’t predict how much you will buy. That amount varies depending on the oil company. In some cases, the “reserve” can be as high as $75.00. In essence, that amount of money sits frozen in your bank account, which is the same effect as withdrawing it. That freeze stays on your account until the selling merchant runs a “batch transaction report”, which tells the bank the actual amount of the gas purchase.
On vacation, credit freezes are more intense. Hotels and rental cars routinely reserve large amounts of money, to protect themselves.
It is during these “reserve” periods of that people bounce checks, that you are susceptible to bouncing checks. That’s because the actual balance in your checking account does not reflect the amount available to honor checks.
So, my advice is to use an actual credit card. While there are credit freezes put on credit cards, those freezes will not cause bounced checks.
If you insist on using debit cards, don’t use them as “credit” cards. Use your pin number. Pin based transactions are registered immediately. The amount of the transaction is deducted from your balance – on the spot. That means the actual balance of your checking account is available to spend. There will be no additional credit freezes to confuse you.
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