How to Cash a Bounced Check

So you deposited a check from a friend and a week later you find out it bounced. Not only are you out the amount of the check but most likely you have been hit with additional fees charged by the bank. Take a deep breath; there are still ways to get your cash back from the bounced check. Here are three ways to go about getting your money if you happen to cash a bounced check.

First thing to remember is to remain positive with the person who wrote the check. For all you know it was an accident, and they simply may have forgotten to transfer funds from savings to checking to cover the check. Once you have the notice and calmed down from the initial shock, pick up the phone and give the person a call. Simply explain the situation and ask them to cut you a new check (or cash would be better at this point given their track record). Mention nicely about the additional fees. Hint for them to cover it. If they push back, let it go. Better to get the amount of the check and not worry about the twenty dollar fee added on. Remember, something is better than nothing.

Second way to get your money is to understand the situation. If the first scenario doesn’t work out and the person truly does not have the money, work out a payment plan (and include the fees in the plan if possible). Payment over time is still better than no payment at all. Always try to keep in your mind this person wants to pay you; they simply just did not have the money to do so. Give them options on how to pay you back. The more flexible you are, the more likely you will see your money in the future. If someone is struggling to pay their bills you can be sure that your check is not the only one that bounced. With that in mind, keep upbeat and try to be friendly. The person is most likely under enough stress as it is. Pushing for your money will get you hung up on and distanced leaving you empty handed.

The third way to cash a bounced check is the hard route, file a police report. Believe it or not, bouncing a check is a crime. It is check fraud and filing a report should only be used as a last resort with the understanding that you and this person are not likely on good terms ever again. In the end, you need to use your judgments. If you have tried various avenues to get your money from the bounced check, then this route may be the only way. You need to balance the friendship against the money and see if it is worth cutting your loses financially or personally. Your decision will most likely be determined by who the check writer is but keep this as an option if needed.

In the end, the best way to cash a bounced check is to remain positive and friendly toward the debtor. Ask nicely understanding of the financial strain they may be under.

by Casey Quinn

Fed Tries Drastic Interest Rates Cuts

For the first time ever, The Federal Reserve cut the main U.S. interest rate to as low as zero, trying to revive credit and end the longest economic slump in over a quarter century. The Federal Reserve also turned its focus to the amount and kind of debt it will buy.

The Federal Open Market Committee said today that it “will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability”. Bloomberg reported today that in a statement from Washington the FOMC said “weak economic conditions are likely to warrant exceptional low levels of the federal funds rate for some time”.

Anticipating that the Fed will buy securities to reduce borrowing cost for consumers and companies, the stock market soared. The Federal Reserve said today that it will cut the federal funds rate to between zero and 0.25 percent. New lending programs and /or asset purchases will now be standard policy.

“The focus of the committee’s policy going forward will be to support the functioning of financial markets and to stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve’s balance sheet at a high level,” the FOMC said. According to the statement, The Federal Reserve will also purchase debt issued or backed by government-chartered housing finance companies.

With unemployment at an all time high, 6.7 percent, and new housing starts the lowest since 1947, it is apparent that drastic measures must be taken to end this deepening economic spiral. Accordingly, the Fed vote to lower interest rates this week was unanimous. Additionally, the Fed lowered the rate on direct loans to banks and securities dealers to 0.5 percent. This will set the payment that commercial banks hold on their reserves at the Fed at 0.25 percent, down from 1 percent.

The move to lower interest rates to improve the US economy has been influenced by Japan’s central bank. To encourage lending, Japan’s central bank kept its main rate at zero percent from 2001 to 2006, flooding the banking system with extra cash to offset deflation.

The Federal Reserves plan differs from Japan’s only in the way it focuses on purchases of short term debt and other assets. Senior central bank officials said that “inflation pressures have diminished appreciably” since the move to lower interest rates began. Officials also said that deflation is not a major concern at this time, noting that stabilizing the credit market is the Fed’s number one priority.

by Jon Mercer