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5 Times You Should Still Pay by Check, According to Financial Experts

Sometimes you're better off busting out your checkbook.

Even if you have a checking account, your physical checkbook has likely been collecting dust for quite some time. Technology has made credit cards and debit cards the most likely alternative to paying in cash. In many cases, the only references to checks you may see are the signs posted by stores warning customers that they don't accept them. But while checks may be less commonly used than they once were, there are still a few instances in which they still come in handy. Read on to discover when you should still pay by check, according to financial experts.

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Paying your taxes

Close-up of unrecognizable woman working with tax return form: she checking papers and using calculator

No matter what line of work you're in, you can count on having correspondence with the IRS at least once a year about how much you owe in taxes. But when it comes time to pay your dues, using a check has a surprising advantage over other seemingly convenient methods.

"As far as the IRS or any other taxing authority, the burden of proof of paying taxes is on the taxpayer," Jeffrey Stouffer, a finance expert and certified financial planner with JustAnswer, tells Best Life. "Clerical errors and data inputs to the wrong account may be the cause of receiving a request for proof. A copy of a check that has the tax description written in the memo section with an endorsement on the back of the check by the tax agency will put an end to that question."

When you can get a discount (or avoid fees)

Writing a donation check to a charitable organization

Paying with a card often feels like a convenient option, but it can come at a price. That's why experts say you should be on the lookout for opportunities where grabbing your checkbook can save you a little money.

"It can make sense to pay with a check in several circumstances—especially if it saves you in fees or you get a discount," says Robert Farrington, founder of The College Investor. "For example, many money transfer apps and services charge a fee—but if you pay with a check, you can avoid that."

This can be especially useful with one of your most significant monthly payments. "Some landlords will prefer you pay with a check for your rent to avoid processing fees, or you as the renter could avoid the fees as well," he says. "Also, smaller service businesses might prefer checks versus having to pay credit card processing fees. You might even get a discount if you ask!"

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Loan payments

refinancing mortgage
comzeal images/Shutterstock

For many people, setting up a recurring transfer for any large monthly payments you're making toward a loan can be an easy way to stay on schedule. However, you might want to consider cutting a check instead to ensure things don't get complicated down the line.

"Housing and loan payments will certainly be useful to have copies of cleared checks on hand for similar reasons to your taxes—especially if the lender is a private party," says Stouffer. "The irrefutable proof of payment will answer any questions they may have."

When paying some vendors online

depositing check on phone
Andrey_Popov / Shutterstock

If you've found a business that's willing to waive a fee or provide a discount for not using a credit card, it doesn't necessarily mean you need to pay cash. Thanks to a lesser-known service, you can easily make a payment without a swipe—even if you're not on-site with your checkbook.

"Most bank-based online bill pay systems will mail a paper check at no additional cost to vendors you need to pay," says Farrington. "You simply enter their information and the bank will mail them a check," adding this can be especially helpful when making some larger purchases such as appliances, construction materials, or a large down payment.

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Legal settlements

wooden gavel on us dollar banknote

Having a regular outgoing payment as part of a structured lawsuit can be a stress-inducing addition to your monthly budget. But experts say opting to pay with a check can help to relieve some of the potential confusion that can come with them.

"Unfortunately, some people encounter events and end up in court. Should a payment be required to settle such an event, a copy of an endorsed check with the settlement agreement will show that the file is closed and nothing more is to be done," Stouffer says.

"And with banking going electronic these days, sometimes only a line entry on a bank statement will contain enough information to trace the payee data of an image is not provided," he explains. "Keep these statements for the same purpose as taxes and loans: proof of payment."

Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.

Zachary Mack
Zach is a freelance writer specializing in beer, wine, food, spirits, and travel. He is based in Manhattan. Read more
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