Yes, cheques still exist. We mostly use cash for everyday transactions but when it comes to big-ticket payments, should you use cash or cheque?
Cash or cheque? This question might seem like an outdated one to you. Most of us don’t use cheques for transactions nowadays.
In fact, many banks charge a fee for every cheque they need to process. Banks also often charge you to issue a cheque book.
So why on earth would anyone even consider using cheques if it incurs extra cost?
Whenever you need to make a big-ticket payment, the sum you would need to pay out might exceed your daily limit for withdrawals at ATMs. To save time queuing up to withdraw your cash from over the counter, some people prefer to use cheques. Most cheques don’t have a limit, making it easier to make payment for big sums.
In countries where safety might be an issue if you’re carrying around too much cash, paying someone by cheque makes sense. After all, what is a small processing fee when you have the peace of mind of not carrying around wads of cash? It is also safer for your payee when they receive their payment by cheque.
Say perhaps your pay is coming in on the 3rd of the month but you need to make payment to your vendor by the 1st. Paying them by cheque allows for you to have that extra couple of days in processing time before your money comes in.
You can also postdate the cheque, so while you have made payment, the payee cannot bank it in to be processed until the date written on the cheque. Just be careful not to let the cheque bounce as it would incur additional charges.
Once you issue a cheque, there is a grace period in which you could request for the cheque to be cancelled. So in the event your vendor has not made good on their promise and you wish not to pay them, you can cancel your cheque even though it has left your hands physically. Just ensure it is done before the cheque is cleared.
Do you usually pay with cash or cheque? Tell us why in the comments!
You might also be interested in these stories below: