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How
'biggest first' can hurt
By Lucy
Lazarony • Bankrate.com
When a bank
decides to cash
the biggest check first instead of by the check number order,
it can help the bank and cost the consumer. Here's how:
It's bill-paying
time. You write four checks:
|
|
|
101
|
$9
|
|
102
|
$10
|
|
103
|
$11
|
|
104
|
$1,000
|
| |
BUT: You forgot
to write in an ATM withdrawal of $50 last week, so although your
check register shows you have $1,040 in the bank, you really have
$990. Your bank will charge you $29 for each bounced check.
If the bank policy is to
cash your checks by check number, just one check bounces:
|
|
|
|
101
|
$981
|
--
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|
102
|
$971
|
--
|
|
103
|
$960
|
--
|
|
104
|
($40)
|
($29)
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| |
Total:
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($29)
|
| |
If the bank's policy is to
cash the biggest check first, though, look what happens -- all the
checks bounce:
|
104
|
($10)
|
($29)
|
|
103
|
($21)
|
($29)
|
|
102
|
($31)
|
($29)
|
|
101
|
($40)
|
($29)
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| |
Total:
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($116)
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So in this case, the "biggest
first" policy would cost an extra $87.
-- Posted: Sept. 21, 1999
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