Checking Out The ChangesIn Check Processing (NAPSA)—Atrusted financial tool—your checking account—is getting a makeover. A new law—the 21st Century Act, or “Check 21”—gives financial institutions an electronic option for processing the standard paper check. Financial institutions will be able to use an electronic “snapshot” of the written check as a substitute when they send it to the Federal Reserve for clearing. For consumers, this means checks mayclear sooner. While some predict that Check 21 may lead to a dramatic rise in bounced checks, experts say these changes may actually present consumers with an opportunity to take a new look at how they manage their checking account. The Check Payment Systems Association (CPSA) and American Consumer Credit Counseling (ACCC)offer the following tips for people dealing with the changes created by Check 21. 1. Don’t spend what you don’t have. This rule is commonly ignored when people “float” their checks. This refers to the risky practice of racing the bank to deposit money to cover checks written before the check clears. The new law may makethis timing gameriskier. 2. Treat every check you write like cash—once spent, the money isn’t yours to spend again—and you can avoid fooling yourself into thinking that the bank’s daily balance reflects money available for you to spend. 3. Keep a record and do the math. Keep track of every transaction and do the additions and subtractions to show the effect on your balance. This rule coversall the bases of checking, including comparing and reconciling your ff VF Me, Experts say consumers should treat every check they write like cash—once spent, the money isn’t theirs to spend again. accounting with your monthly bank statement. Steven R. Trumble, president and CEO of ACCC, said, “Check writing is a powerful financial tool that helps people know where their money is going each month. The basic principles of managing a checking account are practical skills that everyone should know.” Wade Delk, executive director of the CPSA, concluded, “Check writing is a hands-on approach to budgeting that helps people take control of their finances. Check 21 presents an opportunity to remind us of those basic checkingskills. Check 21 also demonstrates how the check is evolving in lockstep with technology.” Another Check 21 development is that consumers may no longer see their original checks returned in each monthly statement. Delk said that according to the American Bankers Association, this has already been the case for 59 percent of consumers. For more information about the CPSA,visit www.cpsa-checks.org. For more information about ACCC, visit the Web site at www.consumercredit.com.
