What Is a Personal Check?

Lainie Petersen
Lainie Petersen

A personal check, spelled cheque in the United Kingdom, is a document that facilitates a payment of money between an individual and another person or business. Check users can also use a personal check to transfer money between accounts held at different financial institutions. The check orders a bank or other financial institution to pay money from its customer's account to the check recipient. Historically, a personal check has been used as a way of safely paying for goods and services without the risks inherent in carrying paper money. Checks also provide documentation of money payments, which can help prevent disputes and assist people in keeping track of their finances.

To use personal checks, an individual must hold an account at a bank, credit union, or investment firm. He will be able to purchase paper checks or print them from his personal computer, which bears both his account number and a routing number that identifies his bank. When he uses a personal check to make a payment, the recipient of the check can then deposit the check into his own checking account or, in some cases, take the check to the check writer's bank. If the issuer of the check has enough funds in his account to cover its value, his bank will pay the recipient the face value of the check.

Until the advent of debit cards and common usage of credit cards, personal checks were the primary non-cash method of payment used by everyday consumers. This was partly a matter of convenience and personal safety, as carrying around large amounts of cash could be both unwieldy and make the carrier vulnerable to theft. The other advantage of using a personal check was that a paid or canceled check could be used to prove that the check writer actually made a payment. The canceled check also documents the date on which the recipient presented the check for payment.

The problem with personal check usage is that, while the personal check is a negotiable instrument that can legally be exchanged for cash, its value is largely dependent on the honesty of the writer. Until the check has actually been honored by the check writer's bank, its recipient cannot be assured of actually receiving payment. If the writer's account does not have sufficient funds to pay the amount listed on the check, her bank may refuse to pay the check, leaving its recipient unpaid. As such, many businesses and individuals now prefer to receive payment through other means, such as credit or debit card, which provide the recipient with automatic confirmation of whether the person making the payment has funds available to make the payment.

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