How To Deal With the Demise of ‘Floating Check’ Times

May 7, 2008 By Tisha Kulak

It used to be that consumers had a little more breathing room when it came time to pay the bills. Knowing your paycheck would be deposited on a Friday, many people felt comfortable writing checks early to cover the bills and were confident there would be at least a week’s worth of waiting time before the check would actually clear and the funds would be removed from their account. However, in 2003, the “Check 21″ measure, passed by Congress allowed banks to substitute check images in place of an actual check in order to process the transactions quicker and more efficiently. Thus, companies can now cash your check within a 48 hour period instead of a 7 day time frame.

While it is no longer safe to rely on floating time, there are some ways you can help protect yourself and still pay your bills on time while living check to check.

Direct Deposit Your Paycheck

While the Check 21 Act may make it faster for companies to take your money, the measure did nothing to increase the speed of depositing a check into your account. You may still have to wait several days for a check to clear and allow the funds to be available in your account. Direct depositing your check will ensure not only that the funds will be available to you faster, most times your direct deposit will be put into your account ahead of those getting payroll checks. Generally, direct deposits will be available by midnight on the day of payroll.

Write Yourself a Check

$100, $500, $1000 - whatever you can afford at the time. Deduct the money from your account but don’t cash the check. You will always have a cushion in your checking account to help you avoid overdraft fees.

Bank Online

Most banks allow you to control your accounts completely online. You have access to your account activity at any time and you can always be aware of how much money you have and where it is going. Contrary to popular belief, banking online is safe due to encryption technology and you may be more likely to be “hacked” when sending payments through the mail.

Request New Payment Dates

Take a look at the due dates for all of your bills. If you see that they all fall in the same time period, contact some of your creditors and ask if you can change your due dates so you have a more even split between paychecks, making it easier to pay on time. Many companies will accommodate your requests but be warned - some may charge you a fee to switch the dates so ask about this when speaking to an authorized representative.

Use Email Alerts

Companies often offer account management on their websites. You can set up your account to notify you by email when a bill is due, when your balance reaches a certain point, and confirmations of payments made. Busy lives often make us overlook due dates so having an instant reminder will help reduce missed payments and the resulting late fees.

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