What is ‘Bad Check’
A check drawn on a nonexistent account or on an account with insufficient funds to honor the check when presented.
“Passing” bad checks is illegal, and the crime can range from a misdemeanor to a felony, depending on the amounts involved and whether the activity involved crossing state lines.
Explaining ‘Bad Check’
Many times, bad checks are written inadvertently by people who simply were unaware that their bank balances were too low. It is always a good idea to have a small overdraft line of credit to cover such situations, or keep a close eye on your balance near bill-paying time.
When there are insufficient funds in an account, the bank will “bounce the check” (refuse to honor it). Banks and vendors frequently charge fees for bounced checks, sometimes exceeding the amount for which the check was written. Online banking can help to avoid writing bad checks by allowing you to view your balance more frequently. Consumers can also create a backstop account that is automatically debited if the primary checking account is too low to pay a specific check.
Further Reading
- Emerging capital markets in turmoil: bad luck or bad policy? – ideas.repec.org [PDF]
- Economy-wide corruption and bad loans in banking: international evidence – www.tandfonline.com [PDF]
- Do democratic transitions produce bad economic outcomes? – pubs.aeaweb.org [PDF]
- The big, bad wolf and the rational market: portfolio insurance, the 1987 crash and the performativity of economics – www.tandfonline.com [PDF]
- Good debt or bad debt: Detecting semantic orientations in economic texts – asistdl.onlinelibrary.wiley.com [PDF]
- Foreign aid: Good for investment, bad for productivity – www.tandfonline.com [PDF]
- Doing well while doing bad? CSR in controversial industry sectors – link.springer.com [PDF]
