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Banking

What’s the Benefit of a Post-Dated Check?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Say it’s Monday and you order the next batch of oil to heat your home, but you don’t get paid until Friday. As a precaution, you write a check with the following Saturday’s date on it and hand it to the delivery man. A day or two later you find out the check was cashed, causing your account to go in the negative and incur an overdraft fee.

Unfortunately, it’s a common misconception that banks have to honor a post-dated check. Illinois Legal Aid points out that banks process up to 45 million checks a day, making it impossible to check the dates on each one.

What is a post-dated check?

When you post-date a check, sometimes referred to as post-dating, you write a date on the check that is later than the current date. So, if today’s date is January 1st and you list January 15th on the check, you have post-dated it.

There are a few reasons a post-dated check is used. The issuer may wish to delay payment until he has the funds in his checking account to cover the amount written on the check. On the opposite end, the receiver may allow multiple payments for an item or service, instead of requiring one big lump sum. He or she may request that you provide all of the checks upfront, but have you list future dates on each of the checks, with the exception of the check for the initial down payment, to correspond with your agreed upon payment dates.

Does post-dating a check work?

Most of the time, post-dating a check does not work. Jessica Allen, a financial counselor and former tax advisor, warns that it is important to keep in mind that if you were to post-date a check to a business, that business would more than likely not notice the date and deposit the check upon receipt.

“Post-dating the check does not guarantee that the recipient will adhere to the date,” she told MagnifyMoney.

Additionally, laws governing commercial transactions in the U.S. explicitly allow banks to cash checks when the date on the check is later than the current date. The exception is if you contact your bank with advance notice to tell them you are postdating a check and do not want it cashed until a specific date.

So, if you contact your bank and give them a reasonable amount of notice that you are post-dating a check, they should not cash the check until the date specified on the check. If they do, the code allows for you to seek restitution for any damages that occurred as a result of the check being cashed early. The Consumer Financial Protection Bureau says that an oral notification is good for 14 days, while written notifications are to be honored for as long as six months.

Alternatives to a post-dated check

Set up future bill payments online through the company’s website or your bank’s bill pay service. Many online bill pay platforms allow you to schedule payments for future dates and will not debit your account until that date arrives.

“That way you can control when the funds are actually removed,” Allen says. Most banks and credit unions offer online banking and banking through their mobile apps, making scheduled electronic transfers a breeze.

If you know the payee personally, you can ask him or her to wait until you have the money in your account. Should the payee agree, you can write the check without worry after the necessary funds have been deposited and made available in your account.

Another option is to put a stop payment on the check if you’re worried it won’t clear. A stop payment prevents the check from being cashed and most banks will allow you to request a stop payment through your online account, over the phone or in person at your local bank branch.

Before you request a stop payment, you’ll want to compare fees, as it may not be worth utilizing this option. For example, Navy Federal Credit Union has a stop payment fee of $20, which is $5 more than their returned check fee. BB&T charges $34 for a stop payment, which is almost as much as the $36 returned item fee that you’d be assessed if your check didn’t clear.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alicia Bodine
Alicia Bodine |

Alicia Bodine is a writer at MagnifyMoney. You can email Alicia here

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Banking

How to Balance a Checkbook: Step-by-Step

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

how to balance a checkbook
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Knowing where each hard-earned dollar is being spent is an important part of budgeting. Using a checkbook register to manually keep track of every transaction, and then balancing it at the end of the month, is a great way to double-check that you’re not overspending in any one category and that your monthly finances are on the right track.

Why balance a checkbook?

Although you can log in to your online account at any time and view your checking account history, the current statement won’t list any checks that haven’t posted to your account yet. This means the balance may not be accurate. Let’s say that your online account balance is listed at $200, but you recently sent a check to the electric company for $100. That check hasn’t been cashed yet, but you don’t realize this. You head to the grocery store and buy $150 in food thinking that you have $200 available to you. When the electric company cashes your check the following day, it bounces because you only left $50 in your account after grocery shopping.

Another important reason to use a register daily and to balance your checkbook regularly is to spot any errors and identify any potential fraud as soon as they happen. That gives you time to correct any mistakes before they affect your account and time to report any suspicious activity before you are held liable for any charges.

Balancing a checkbook is easy and quickly becomes second nature after you’ve repeated the process a few times.

Follow the steps below understand how to balance a checkbook.

Step 1: Recording your transactions

The first step to balancing a checkbook is to list each transaction as it occurs. This includes each check you write and any deposits you make, as well as all debit card swipes, ATM withdrawals and assessed bank fees. Always keep a running balance by subtracting the withdrawals and adding the credits.

Step 2: Review your monthly bank statement

When you receive your monthly bank statement, you’ll want to set aside a few minutes to reconcile the statement to your checkbook register. Start at the top of the bank statement and work your way to the bottom one transaction at a time. As you spot that transaction in your register, place a checkmark in the provided column.

Once you reach the bottom of the bank statement, you’ll be able to look back through your register and spot any missed information. For example, if you quickly grabbed $20 at the ATM one day with the intention of writing it on the register when you got home, but then forgot, you’d notice the transaction is listed on your bank statement, but not on your register. You can now add that transaction to your register to correct the balance.

Step 3: Check that your balances match

Before you can check to see if your register balance matches the bank statement ending balance, you’ll need to take into consideration the transactions that have not yet posted. To do this, start with the ending balance listed on your bank statement and add in any deposits you made since the statement was issued. Next, subtract from that balance any outstanding checks or withdrawals. The total from the bank statement should now equal the total from your check register.

If you don’t want to complete this step on paper, some financial institutions have online checkbook balancing calculators you can use. You simply type in your statement’s ending balance and add in any outstanding checks and deposits. The computer will do the math for you.

Step 4: Address any errors or fraudulent activity

In the event that your balances don’t match, go back through each transaction and use a calculator to spot any arithmetic errors, as it’s easy to make a mistake when you’re in a rush and trying to do the calculations in your head. If you still can’t locate the discrepancy, ask a bank representative to review the statement with you.

Should you come across any charges that you did not make, notify your financial institution immediately to reduce your liability and to get the company’s fraud department on the case. This is especially important for debit fraud, as the Electronic Fund Transfer Act (EFTA) holds the account holder responsible for $50 when reporting happens within two business days after the loss was discovered and $500 if reporting happens between two business days and 60 calendar days after you received your monthly statement. If you wait longer than 60 calendar days, you’ll be liable for all of the money that was stolen from your account, as well as any fees that occurred because of the fraudulent withdrawal.

Step 5: Draw a line in your register

Now that you’ve finished balancing your checkbook register, draw a line under the last transaction. You can label the space in front of the line with the date if you wish. This way, you’ll quickly be able to locate the starting point for your next bank statement when you receive it.

Step 6: File your bank statement

The final step is to file your bank statement away for safekeeping. The IRS recommends saving important documents, like your bank statement, for up to seven years. Since banks are only required to keep records of your account for up to five years after you close it per federal regulation, you don’t want to simply rely on electronic records.

Other ways to keep your checking account balanced

Although online banking won’t reveal any outstanding checks until they’ve been cashed by the recipient, there is still a way you can utilize technology to keep track of your account balance. Budgeting apps are an excellent alternative for individuals who aren’t keen on using pen and paper, and they only take a minute or two to update at the end of each day.

Check out MagnifyMoney’s latest roundup of the best budgeting apps: The 11 Best Free Budgeting Apps.

Once you select a budgeting app and download it to your laptop or Smartphone, you can sync the app with your current accounts, or enter your information manually. Start off by letting the app know your income for the month. As you make withdrawals, record them in the app so you always know how much you have in your account. The apps even allow you to set up alerts that will notify you when your balance reaches a certain level, thus avoiding incurring any overdraft fees.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alicia Bodine
Alicia Bodine |

Alicia Bodine is a writer at MagnifyMoney. You can email Alicia here

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Small Business

Quick Business Loans: 5 of the Best for When You Need Money Fast

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Whether an important piece of equipment breaks down or you need to stock up on seasonal inventory, a fast business loan may be the way to go. Every day you wait to receive the necessary funds to successfully operate your business, your company can lose money.

Fortunately, there are online lenders that understand that time equals money, and, as a result, will expedite their applications. Funds are then released in a timely manner, sometimes even within 24 hours.

What kind of loan meets your needs?

The first step in your search for a quick business loan is to determine which type of loan is best. Many online lenders offer the following types:

  • Short-term loans. Short-term loans typically have repayment terms of up to 12 months. This is a good option if you’re looking for a lump sum with a reliable repayment schedule. With a short-term loan, you can increase your marketing efforts, update your computer systems and even purchase additional inventory.
  • Short-term lines of credit. Also commonly referred to as an open-end credit, a short-term line of credit gives the borrower access to a set amount of funds that are pre-determined by the lender. The borrower may then withdraw cash from the line of credit as needed, instead of simply taking out one lump sum, as with a short-term loan. This type of funding works well for companies that need to make payroll or cover their quarterly taxes, but don’t have the immediate operating income on hand to meet the expense.
  • Equipment financing. Equipment financing allows you to free up your working capital by providing the funds needed to purchase or lease equipment that is essential to the running of your business. Almost any type of equipment is included in this type of loan, whether it’s used or brand-new.
  • Invoice factoring. Invoice factoring allows you to sell your invoices to a lender in exchange for immediate cash. This is an excellent option if your business is made up of customers who pay invoices at a later date, such as the clothing industry. The lender will look at the customer’s ability to repay, since they are the ones responsible for paying the bill. This is the opposite of more traditional loans, which would require your company to have a good credit history in order to qualify for funds.
  • Merchant cash advance. A merchant cash advance gives business owners the opportunity to obtain an advance on their future earnings, typically their credit card sales. You pay the money back through a percentage of all new sales. You may want to consider this option if you need to replace inventory that is in high demand, or you want some short-term capital to renovate your storefront. Be warned: These types of “loans” can be very expensive.

How to qualify for the loan of your choice

Once you know which loan works best for your business, you need to make sure you qualify before you submit an application. Each lender has its own requirements, but here are a few of the common qualifications:

  • Credit score. Companies like OnDeck Capital list a minimum credit score of 500 as part of their qualifications, while BlueVine requires a personal credit score of 530 for invoice factoring and 600 for a business line of credit. Others, such as Kabbage and National Funding, don’t have a specific minimum credit score.
  • How long you’ve been in business. Expect lenders to take a look at how long you’ve been in business. The required length of time ranges from six months to two years, with one year being the most common.
  • Amount of annual sales. In order to determine if your company can pay back a business loan, the lender will need to review your annual sales. OnDeck Capital and National Funding both have a $100,000 annual sales requirement, while Kabbage only requires half that amount. Rapid Finance breaks down its qualifications to $5,000 in sales per month, which comes to $60,000 a year.
  • Bank statements. Bank statements are another commonly requested item. Make sure you gather your company’s three most recent bank statements before you begin your application.
  • Additional documents. While not as common, some organizations, like Rapid Finance, require applicants to present additional documents. These include a government-issued photo ID, a voided check from your bank account and your last three credit card processing statements (for merchant cash advances).
  • Industries served. Although companies like OnDeck Capital serve more than 700 industries, you can’t get a quick business loan if your industry isn’t on the list of industries served. Typically excluded industries include religious organizations, adult entertainment industries, boarding houses, fortune telling businesses, firearm vendors and drug dispensaries.

5 of the best business vendors offering quick loans

BlueVine

BlueVine offers both invoice factoring and lines of credit, and provides quick approvals with funds being disbursed to applicants within hours. Those who opt for a bank wire at a fee of $15 will receive their money the same day, while ACH transfers are available the next day for free.

The company funds between $5,000 and $250,000 to businesses that meet its qualification standards. It will look at your personal and business credit history and your company’s current cash flow, and also consider how likely your customers are to pay their bills.Business owners will need a credit score of 600 and above to qualify for a business line of credit and a credit score of 530 and above to qualify for an invoice factoring option.  Businesses can also receive a higher credit limit if they are willing to connect their accounting software with their BlueVine account.

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Kabbage

Kabbage cares more about your business performance than it does your credit score. Its main qualifications include being in business at least a year with $4,200 in monthly sales. Applicants can apply for as little as $500 or as much as $250,000 in short-term loans or invoice factoring. Instead of an APR, Kabbage charges companies a monthly fee of one-sixth of the total loan amount on six-month loans, one-twelfth of the loan amount on 12-month loans, as well as an additional undisclosed monthly fee.

The best part about using Kabbage is how quickly it makes funds available after approval. Customers who use their PayPal accounts will receive their money within minutes, while borrowers who wish to have their money deposited into a checking account will get the cash within three business days. If you take advantage of the Kabbage Card to access the funds in your line of credit, you can also use the card to make purchases anywhere Visa is accepted.

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OnDeck Capital

OnDeck Capital offers two loan types: short-term loans and lines of credit. With the short-term loans, borrowers can apply for as much as $500,000 at a simple interest rate as low as 9% with an origination fee between 2.50% - 4.00% for a first loan, 1.25 to 3% for a second loan and 0 to 3% on a third loan. Terms range from three to 12 months.

Should you prefer a line of credit, you’ll have the option of borrowing up to $100,000 at an APR as low as 13.99%. There’s a $20 monthly maintenance fee and repayments are automatically deducted from your business bank account on a weekly basis. To qualify, you’ll need to have been in business at least one year with annual sales of $100,000. You’ll also need to be a majority owner with a personal credit score of 600 or higher. Once you’re approved, you can get your funds in as little as one business day.

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National Funding

National Funding allows customers to apply by phone or online and receive a decision within minutes. Funding is then made available within 24 hours. The company offers both small business loans of $5,000 to $500,000 for those who wish to grow their businesses, as well as equipment financing and leasing of up to $150,000 for those who need new equipment to keep business running smoothly.

Merchant cash advances of up to $250,000 are also an option. This type of financing doesn’t require any collateral or have any hidden fees or costs. National Funding even approves merchant cash advances on the same day you apply. Although the company has an astounding 60 percent approval rate, you’ll still need to meet its qualifications. These include being in business for one year, providing three months of bank statements and showing annual sales of $100,000 or more.

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Fora Financial

Fora Financial keeps things simple with a one-page application that only requires uploading a few bank statements. Approvals are made within 24 hours with funds being transferred just 72 hours after that. Borrowers can choose between a small business loan or the merchant cash advance, both of which are available in amounts up to $500,000.

As an added incentive to make additional payments on your loan, the company offers a prepayment discount of up to 10 cents on the dollar. Fora Financial also offers the following financial products to meet the needs of your company: businesses lines of credit, SBA loans, equipment loans, inventory loans and bridge financing.

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The bottom line

If your business needs money fast, you’ll still want to take the time to research each lender and their available offers to get the best deal. Consider the length of time to funding, the APR and the daily, weekly or monthly repayment amount. If you can afford the loan, it might be exactly what you need to take your business to the next level.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alicia Bodine
Alicia Bodine |

Alicia Bodine is a writer at MagnifyMoney. You can email Alicia here