Semblance of a Whole

A Bit on Banking

Reading about the advantages of the French house-buying system over the British one reminds me of one of my own favorite axes to grind: The advantages of the British banking system over the American one, at least when it comes to checking accounts (or should I say "current accounts," as they do across the pond).

In the US, writing a check can be problematic, because the recipient can never be sure that the check is good. If the account is overdrawn, the check bounces, and not only does the person who wrote the check get charged, the person who received the check as payment gets charged as well. Because of this penalty, many shops and restaurants will no longer accept payment by check. It is not uncommon for small shops to publicly post photocopies of all the bounced checks they've received as a sort of gallery of shame for all the other customers to see.

In the UK (or at least in Scotland) they have this thing called a cheque guarantee card. (N.B. When in Scotland, spell as the Scots do.) If you are considered trustworthy by the bank, they'll give you such a card. When you write a cheque, you present the card to the merchant along with the cheque. They take down the number on the card, and this essentially guarantees them that the bank will honor the cheque. If the writer of the cheque has overdrawn their account, that's between them and the bank. The merchant doesn't get caught up in the crossfire. I just don't understand why we don't do that over here.

With the advent of debit cards and PayPal, I suppose it's a moot point. Checks (and cheques) will probably be obsolete in a few years anyway.