Should You Have a Checking Account?

There are pros and cons to having a checking account. Banks want you as a customer; they sometimes offer free checking accounts to get you in the door. On the other hand, the risk of online fraud and of getting soaked by bank fees is sometimes daunting.

Banks need customers, even small customers. They can make a little bit off each small customer and that adds up to a big profit at the end of the year. To that end, banks run special offers from time to time. They serve up 'free' checking accounts. A free checking account might include free check printing and no transaction fees for writing a moderate number of checks each month. Often the free account excludes customers from monthly maintenance fees as well. Some banks provide these accounts in conjunction with a minimum balance in another type of account such as a savings account or an investment account. Their strategy is to make money through the other accounts and offer the free checking account as a 'loss leader' product in order to entice new customers.

If your checking account falls under a minimum balance, fees could be levied against it by the bank. If you write a check that can't be 'covered' by the amount of money in the acount, an overdraft fee could be charged by the bank. The overdraft fee is on addition to fines and other charges levied by the recipient of the check. Laws vary from state to state; to stay out of trouble, don't bounce checks!

Check fraud is an ongoing problem for all banks. A check contains your signature and your account number; it's sometimes trivial for a devious criminal to copy that information from an existing check and forge additional checks against your account,

Checks get lost or stolen in the mail. The postal service handles billions of mail pieces each year. The chances of your check being lost or stolen in the mail are extremely remote, but it does happen.

Some images maybe courtesy of http://www.sxc.hu/