Why Paper Checks Refuse to Die

published 30 March 2016

We now have credit cards, debit cards, prepaid cards, PayPal, ApplePay...the list goes on. Yet the woman at the supermarket ahead of you just pulled out her checkbook. What gives?

While electronic payment options have replaced paper checks as the main alternative to cash, Americans cling to their checkbooks. There’s a practical reason why: Some new payment methods aren’t widely accepted. Your utility company won’t take Venmo, for example, and Walgreens won’t take bitcoins. But both take checks.

There’s also a financial reason. The delay between when a check gets written and when the funds are withdrawn from an account is known as the “float.” During this period, the check writer can continue to earn interest on the money. This includes the time when the check is, quite literally, in the mail. Big businesses, in particular, can profit from the float.

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But perhaps the biggest reason consumers keep writing paper checks is neither practical nor financial. Put simply: Old habits die hard.

Learn why seven more everyday things refuse to die including fax machines and parking meters.

In his former role as Senior Online Editor, David edited and wrote a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, David worked on numerous Kiplinger publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He co-hosted Your Money's Worth, Kiplinger's podcast and helped develop the Economic Forecasts feature.