1. If you pay with an ATM card and the person behind the register asks you, "Debit or credit?" what should you say?

a. Debit.

b. Credit.

2. When you deposit a check or cash into a checking account, in most banks you can count it as part of the money in your checking account starting...

a. that day.

b. the next day.

3. Outstanding checks are...

a. checks you've written that haven't been cashed by the person or company you wrote them to yet.

b. checks that your bank hasn't used some of your money to pay the bank or financial institution where the person or company you wrote the check to cashed the check.

4. A canceled check is a check that...

a. you call about and then get back because you didn't have enough cash in the account to pay for it.

b. you wrote, that has been cashed, and then sent to your bank for collection of funds and then returned to you for your records.

5. If a check bounces, it means that

a. the check was written for more money than you have in your account at the time.

b. it gets cashed the same day you wrote it.

Bouncing a check means that you write a check and don't have enough money in your account to cover it. When you write a check, say for fifty dollars, you are giving your bank permission to pay out $50 to the person who cashes the check.

And actually the person doesn't usually get the money directly from YOUR bank!

Here's what happens...

When you write a check for $20 to your friend Alex, (it's for one of those awesome necklaces she makes and sells;) Alex takes the check to her bank. She COULD put it into her checking account if she has one, but she decides to cash it. She signs the back and gives it to the teller. The teller gives her $50.

Eventually, this check is used by Alex's bank to get your $50. Your $50 is then put into Alex's bank to replace the $50 they gave to her.

You BOUNCE a check if you don't have enough money in your account when your bank has to pay out the amount written on the check.

Here are some of the most common ways to mess up your checking account and end up bouncing a check...

The Don't Bounce Your Check Check List

Did you forget that the bank is deducting a service charge from your account? If they deduct it and you don't enter it into your check register, you'll end up having less in your account than you thought!

Did you count on your friend Alex to cash the check you wrote at her bank so that it would take another day to get to your bank? (You were planning on running downtown tomorrow in the AM and making a deposit.) Guess what? Alex went to YOUR bank to cash the check!

Did you write a check when you were out and forget to enter it into your check register? BIG mistake!

Did you use the ATM machine and believe the balance that the receipt said you have? It doesn't show outstanding checks. Those checks that haven't come to your bank yet WILL be there soon! ALWAYS go by your check register balance.

Did you write a check for say $25 and write it down as $20? Uh oh!

Did you enter a deposit twice? They only got it once!

Did you buy new checks? If you did, the charge for these usually shows up as a debit to your account. Remember to find out how much they are going to be and enter that amount into your check register.

Checking is one place where it is very important to pay attention to time and details. You can refuse, but IF you do, banks impose BIG nasty charges for every single bounced check! So check on your checking and keep your checks rolling along smoothly. No bouncing!!!

For more information on checking account basics, check out this great site.

Register
Your check register is the part of the check book where you enter all the checks you write, the deposits you make, your ATM transactions, and any other charges that the bank imposes on you. Usually it is a little booklet kind of thing at the top, but it can be just a series of endstubs from each check as well.

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