Who Still Writes Checks?

[wanderer2575]

$3?! Gross! I'd definitely be bothering my city council rep about that if it was that high. But then again, it sounds like you're probably out of city limits, so you probably don't have a city council rep...

In my town, it's $1.05 for a payment out of a bank account; 2.95% of the total if using a credit card.  Water/Sewer, minimum per quarter, is $180.95, so the minimum charge for using a credit card would be $5.34.

In another town I have to pay the water/sewer bill, it's a $1.95 for an ACH payment from your bank account, no limit on the payment; $4.95 flat charge for a Credit Card, with a $500 limit.

While you appear that these charges are high, you're a business owner and should know exactly what you're charged, so why do you think the fee suddenly seems unreasonable?  Someone needs to pay, and these are basic charges to cover the fees charged to the town.

I have no problem with governments and public utilities adding reasonable charges to cover their costs for processing ACH and credit card transactions, which unlike retail are not built into the tax or cost structure.  A 2.95% credit card fee is very reasonable to cover the merchant fee charged by Visa/MasterCard/Discover/AmEx.  The charge probably varies by card, so to keep things simple the government/utility charges the highest possible cost to everyone.  On the other hand, a $3.00 fee (or even a $1.05 fee) assessed by your town to initiate an ACH Debit transaction is criminal.  If the town's bank is really charging that much, it's time for the town treasurer to look around for another institution.

[jeffandnicole]

$3?! Gross! I'd definitely be bothering my city council rep about that if it was that high. But then again, it sounds like you're probably out of city limits, so you probably don't have a city council rep...

In my town, it's $1.05 for a payment out of a bank account; 2.95% of the total if using a credit card.  Water/Sewer, minimum per quarter, is $180.95, so the minimum charge for using a credit card would be $5.34.

In another town I have to pay the water/sewer bill, it's a $1.95 for an ACH payment from your bank account, no limit on the payment; $4.95 flat charge for a Credit Card, with a $500 limit.

While you appear that these charges are high, you're a business owner and should know exactly what you're charged, so why do you think the fee suddenly seems unreasonable?  Someone needs to pay, and these are basic charges to cover the fees charged to the town.

I have no problem with governments and public utilities adding reasonable charges to cover their costs for processing ACH and credit card transactions, which unlike retail are not built into the tax or cost structure.  A 2.95% credit card fee is very reasonable to cover the merchant fee charged by Visa/MasterCard/Discover/AmEx.  The charge probably varies by card, so to keep things simple the government/utility charges the highest possible cost to everyone.  On the other hand, a $3.00 fee (or even a $1.05 fee) assessed by your town to initiate an ACH Debit transaction is criminal.  If the town's bank is really charging that much, it's time for the town treasurer to look around for another institution.

Towns have millions of dollars flowing thru their bank accounts, with a lot of activity.  An ACH charge is just one of many factors in choosing a bank, and any ACH payment for a taxpayer is one of 3 options they can choose (Bring cash or a check in person; pay by check in person/drop off/mail, or ACH).  Trying to lower the ACH charge (which is ultimate paid by the taxpayer) may result in higher fees elsewhere or a lower interest rate.   High volume, high dollar value customers aren't anything like what a consumer is used to dealing with.

If I choose to mail it, I'm paying 55 cents, plus the cost of the envelope, plus the cost of the check.

If I choose to go in person, I'm paying for the cost of the check plus mileage on my car.  If the IRS says the reimbursement rate is 56 cents per mile, then a 2 mile round trip cost me more in the long run than it did for the ACH.  If I need to take mass transit, taxi or an Uber, it'll be more.

If I choose to pay with cash, it would most likely have involved a trip to the bank and a trip to the municipal building.

So as you see, no matter which way you pay, there's a cost incurred, even if it's a hidden, discreet cost.

[frankenroad]

Personally, I write very few.  My buddy has season tickets to Ohio State Football games, and he usually sells me one game a year.   A couple years ago, when I went to write him a check, I realized that the last check I had written was to him for the tickets the year before.   All my utilities, insurance, HOA fees, church contributions, etc., are either auto-pay or I go online to pay them.   I don't pay a fee for any online payments I make.  Prior to the pandemic, I used to pay local businesses in cash, because the fees they pay when you use a debit or credit card are outrageous.  Now, many of them don't want cash, so my trips to the ATM are down to about once every 3 months.

I am the office manager for a small construction company, and as a result, part of my job is generating checks.   We probably issue 15-25 checks a week, plus payroll checks.   Our salaried employees all get direct deposit, but only a handful of our hourly employees opt for direct deposit.  The main reason they don't do it, is the lag time.   Our pay period runs from Thursday through Wednesday.  I run payroll Thursday morning as soon as I get the timesheets, and they get their checks that day.   For the ones who opt for Direct Deposit, the money does not hit their accounts until Friday night at the earliest. 

About 80% of our customers pay us by check.   A few use ACH.   We don't accept credit cards.

[hbelkins]

$3?! Gross! I'd definitely be bothering my city council rep about that if it was that high. But then again, it sounds like you're probably out of city limits, so you probably don't have a city council rep...

I don't know if you can drop off payments at city hall or not. The mailing address for Norman city bill payments is a P.O. box in Oklahoma City for some reason...

I do live out of the city limits, but the water system is administered by the city. The online payments are handled by a third-party processor so the extra charge is probably their fee.

[qguy]

I need to write at least two checks each month. One is for the rent on the house I and my family live in (a tiny third-party real estate firm handles the payments and they don't have an online system) and one is to the stable where my wife boards two horses.

Until recently I had to write a check for our water bill (on a quarterly basis), but the local water authority finally got its act together and created an online payment system. (Rushing headlong into the 1980s... whoa, don't look back!)

[Konza]

I used to write about 300 checks a year.

I started paying my bills electronically about eighteen years ago.  I now write about one check a month- mostly to charities and small businesses, and to the local government which still won't accept an electronic payment.  If I wait too long to enter the payment for the sewer and trash bill, my bank does not have the time they require to cut the paper check and mail it to the City, so I'll write the check and mail it locally.

At the grocery, I used to use my debit card, but it much more often than not makes more sense to pay with a credit card and take advantage of the "float", especially if you get a cash rebate or some kind of point bonus.  I don't think I've written a check at a grocery since 1996.

[renegade]

I did, just yesterday.   A big one ... paid my car off.

Stimulus check comes, stimulus check goes.   

[kkt]

One today for the plumber.  They will take credit cards, but with a service charge.

[SP Cook]

I pay quarterlies for tax.  Used to have to write a check for both, but the feds now have an app for it, so its just the state.  I buy gold coins as I can and the dealer charges extra for credit cards.  That is it.  A book of checks will last me decades.