In my view the check is an outdated method of payment, only useful for paying the occasional bill, your taxes, and minor things that they don’t take credit cards for (lawn service, paying family members/friends, etc.). There is no advantage to using checks in a retail environment. How do I come to this conclusion? Glad you asked…

• Value: You are paying the same amount at the register regardless of payment method, so there is certainly no advantage to writing checks.
• Speed: Credit and debit cards are way quicker than checks, even if the cashier checks your ID to the cardholder name. Even cash transactions where change has to be made are quicker than the typical check transaction.
• Record keeping: Now matter how you pay, you should be able to get a receipt, which provides evidence of the transaction if you need it for taxes, expense reimbursement, etc. Debit and credit cards are even better since you also get the listing of transactions on your account statement.
• Privacy: Do you really want the kid down at the Wal-Mart having access to your personal information including account number? You do realize that is all the information they need to access the funds in your account, right?
• Liability: Related to the point above, what happens if someone gets your account information? If you used a credit card, you are technically only responsible for the first $50, and in most cases the credit card issuer won’t even make you pay that. You also have the luxury of not being out the money while the issue is being resolved. Debit cards and checks are a different story, where the bank can hold the funds in question while it completes its investigation, meaning you don’t have access to your money. And it is a lot harder to prove a transfer was unauthorized if they used you account number to access the funds directly.

For the record, it annoys me even more when people wait until the cashier has completely finished ringing the transaction to search for the checkbook and beginning writing the check, as if it is a surprise that you actually have to pay for your purchases! But of course my ire in this instance isn’t limited to check writers, but any idiot who waits that long to begin fumbling through their purse/wallet/pockets for their method of payment. All of them should be taken into the parking lot and beaten with their purchases.  

So am I missing something here about the virtues of checks? Do I just need to be more patient with the old people and the stupid when they whip out the checkbook?

Here is my experience with several of my card issuers in trying to set up automatic payment plans:

Citi – You can contact customer service to get a form for your accounts. They will send you a form to complete, which allows you to select to pay the minimum due, full balance, or specified amount each month. You simply complete the form and attach a cancelled check to enroll.

First National Bank of Omaha – Same as Citi. They often send the form with your new card when opening the account, but you can always call customer service to request it.

Capital One – Same as above.

Chase – The easiest of them all as you can complete the request entirely on their website. From the main online banking page, click “Payments & Transfers”, then “Card Payments, then “Set up automatic payments”. From there you can enroll your checking account and set up the automated payments of minimum due, statement balance, or specified amount. The really nice thing about this system is that the request is almost immediate, so their is not uncertainty as to when the payments will start. Enrollment is confirmed on your statement and the exact payment amount to be deducted is noted. Also, it is clarified that if you make a payment prior to the due date, the autopay amount will be adjusted for it.

Bank of America – BofA is the worst for this. They do not offer an automated payment setup that allows the full balance to be paid from an non-BofA account. The only possibility is for old MBNA-issued cards, you can set up automatic payment of the minimum due through the Bill Pay Choice system, if enrolled.

No more missed payments or late fees!

This is fantastic if you play the “app-o-rama” game, which I’ll probably post about in the coming weeks. The only disadvantage I see is that if you have an old MBNA credit card account, you can use the billpay feature on that card to pay other credit cards, gaining about an extra month of float. It may not seem like a big deal, but if you are paying other cards an average of $5000 total each month, over the course of a year the interest earned on the extra float would be about $200, assuming a 4% return. The question then becomes how much is it worth to you to not be bothered with scheduling the payments each month. At this point for me the time savings and the assurance I won’t miss a due date make it worthwhile for me to enroll.

The valuable portion of the article was his descriptions of their three classifications of customers. Chase classifies the customers into “Best”, “Valuable” and “Non-Profit”:

“Best”: These are the customers that are treated like gold. For these folks, most every wish is granted, whether it be a waived finance charge or a forgiven late fee. To be in this group, you have to move a lot of money through the bank or have a large loan you are paying a lot of interest on. It is estimated that only 5% of customers are in this group.

“Valuable”: This is your average customer who pays their bills on time and is generally considered a good customer. This customer can get the occasional fee waived, but shouldn’t expect too much.

“Non-Profit”: This is the type of customer everyone should aim to be. This customer is the one who pays their bill in full and on time every month, doesn’t go over credit limit, doesn’t ever pay finance charges, and earns and cashes in rewards. Basically, the bank doesn’t make any money on these customers. If you are one of these customers, any requests for special treatment or fee waivers will probably be refused. And don’t bother to threaten to cancel because they really don’t care if they keep you as a customer.

No one will argue that this is fair, but life isn’t fair. At least now you’ll know what to expect when you call up customer service.

You can apply for the card by clicking here.

Thank You points can be redeemed for gift cards, travel, and other items. On most gift cards, 10,000 points can be redeemed for a $100 card, which means that at minimum you will get a minimum of 3% back.

There are two catches on the offer that are pretty easy to work around:

1. The annual fee is waived for the first year only. Afterwards the annual fee is $99.
2. The promotional reward levels are only for the first 24 months. Afterwards you get a measly 1 Thank You point per dollar.

Of course the work around is to cancel the card before the one year anniversary. Just be sure to stop using the card about a month before you close the account so you don’t forfeit any points.