Guelder Rose

Which is what my husband told me when I first came here and asked him why he was still using a cheque book! He uses cheques to pay all his monthly bills and therefore has to keep a log of payments made in order to know what his account balance is. In the past he did try to set up automatic payments, but got stung by more than one company taking money that was not due and then having the awful task of putting that right without any help from his bank.

At one time in the UK, I would keep a log of all payments made, but with online banking and all the benefits that brings I no longer found it necessary. I actually chose to cancel some direct debits, because with online banking I could opt when to pay each bill and didn't need to buy postage stamps and send each bill off in the post and then hope that Royal Mail would deliver it in time. I did still keep accounts, but that was only for my business accounts.

I still find it hard to accept that America has a banking system that is so backward ... and the people I know here seem to find it very hard to accept that England has a far superior banking service!

fatbrit

Only using checks isn't going to help him much! All you need is a name, routing # and account # (all happily written on your check for them!) and they're all set to make these regular withdrawals.

The standard story goes like this. You sign on at a gym and they tell you just to make the first payment by check as they'll conveniently (whose bloody convenience!) take the rest automatically. You stop the gym membership and they just keep taking regardless. Unless you go down the bank and actually scream the regulations at them or threaten them with the statutory authorities, they are likely to just hold there hands up and say there's nothing they can do about it. There is, of course, but the staff are only there to sell you new products (bonus!) and dealing with your nightmare will take a long time and not do the individual who spends it any good whatsoever.

Frequently, people end up closing their checking account and opening another as the only way to make it go away. And I've even heard of banks (presumably in cahoots or perhaps from incompetence?) paying from closed accounts and then trying to collect off the customer (including overdrawn fees as well, of course!) and reporting them to Chex Systems and the three credit bureaus.

The safest way to pay anything is with a proper credit card if this is possible for you (don't exceed 20% - 30% of limit though or this will muck up your credit score). This gives you the most rights and protections. In order of preference, I use credit card, bank's Internet bill pay, check and then cash. I never use my debit card for anything other than the occasional cash out of the ATM since if they take debit they'll also take credit and credit gives me more protection (and cashback!). I have been known to make an exception at mom and pop stores as I know it kills them, but that's about it.

Hiro11

I think the persistence of checks (not "cheques", note) in the US has more to do with the fact that American individuals and institutions are unwilling to change than banks being archaic. I work for a company that owns several retail banks and I can tell you that we'd love nothing more than to do away with check processing but there are too many companies who's AP systems were built in the 70s and too many old fogeys who still write checks at the grocery store (my parents, for two).

It is definitely possible to automate payments and run a modern bank account in this country. Personally, I haven't written a check for years (except to friends to whom I owe money). As others have noted programs like Quicken are widespread, online bill pay is offered by every untility and by most of the larger building management companies and internet banking is offered at every bank I can think of. It's just not pushed by the banks as many people are stuck in the dark ages and would object.

Guelder Rose

And my husband would love not to have to write cheques each month for his bills ... but until the banks here offer the same level of protection as the UK banks do it isn't really a viable option.

fatbrit

There's also the fact that the banks can earn interest on money that is "pending" and this allows them to offer so-called free accounts. The banking lobby is one of the more powerful ones in DC. They have no wish to change.

Guelder Rose

He is aware of the problem with cheques ... and will only send a cheque to certain companies, i.e. those he feels he can trust not to suddenly empty his bank account!

It just seems so odd that where banking is concerned in this country, there seems to be so little trust between the customer and the bank .. but then again, once you start to understand the system in use here it is understandable.

fatbrit

Yep -- you can play careful, but then again there's a large element of luck in it. and while i believe you'll probably get your money back eventually, it's the inconvenience of it.

On the advice of a colleague, I did the following when we arrived:

I opened a virgin, free-checking account at a bank we don't use with $100, opened the online banking, and ordered the checks and ATM/Debit cards. The cars have been used once -- to check the balance in the bank's ATM machine. I have used only one check to open a link between an IngDirect account and this checking account. The statements are online, and all the privacy options were activated about not mailing me when the account was opened. Once every 3 or 4 months or so, I transfer $10 from IngDirect to the account, then back again.

The only reason for this account is to take over should the everyday account go tits up due to bad luck. Sounds silly, but hearing horror stories from others, it seemed worthwhile.

Big D

What is the benefit of this over just opening a new account if your main one goes breasts skyward?

fatbrit

Two or three weeks with no bank account as you're waiting for the checkbook and cards to arrive. Also, brand new accounts have longer holds on them and additional safeguards -- this one won't.

Partystar

I use my leftover pay from 18 months ago to buy birthday/Christmas presents for my friends back home (from Amazon.co.uk or CD Wow) or I send cheques to them instead, that way I don't have to worry about changing money over or conversion charges.

Partystar

Not sure that they can do that. I had a bank with about £1.10 in it, that I opened when I was at primary school. I found the payment book in a box of old stuff while I was spring cleaning years later. I went down to the bank to update it, so that I could start using it as a savings account & it had gone up to about £3, which I thought that was pretty amazing!!!

Big D

They can - they will be able to give you the cash back but if there is no activity they can make it dormant and you can use it, happened to a friend of mine with Naff West. Obviously not all banks do it?

Elvira

One problem I found with one of my UK accounts was that, not having used it for a year or so, they downgraded it to a 'basic' account. This means I now only have a basic cashcard and cheque book, but no debit card, nor the ability to put direct debits in place.

Shahlax

Natwest mark an account dormant after 2 years of no activity. Then they send you a letter telling you they will close the account. I guess they close it after that but don't know for sure.