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Though the terms may be used interchangeably, there are major differences: With a credit card, you can either pay your full monthly bill or a portion of it. With a charge card, no matter how much you owe, you’re expected to pay the monthly bill in full.

That’s not the only thing that sets these cards apart. The two also vary in their accessibility, flexibility, spending limits, and costs. If you’re wondering if a charge card vs. a credit card is a better fit for you, read on to understand their key differences, which can help you decide.

How Charge Cards Work

In some ways, a charge card is much like a regular credit card. When you use it to make a purchase, you’re borrowing money from the card issuer. And when you pay your bill, you’re paying the card issuer back.

But there are several things about the way charge cards work that make them very different from traditional credit cards. And because of the way they work, there are benefits and risks of charge cards to consider.

As mentioned above, a charge card holder’s obligation to pay the bill in full each month is probably the most important distinction. Because you don’t have the option of carrying forward a balance, you won’t pay any interest. But if you don’t pay the balance in full by the due date, you could be subject to a late fee and restrictions on your future card use.

Another thing that makes a charge card unique is that there’s no pre-set credit limit. This offers charge card holders some added flexibility, but it doesn’t mean you can go out and spend as much as you want any time you want — even if you’ve stayed current with your charge card payments.

A transaction still may be declined if it exceeds the amount the card issuer determines you can manage based on your spending habits, account history, credit record, and other financial factors. To avoid any confusion, card holders can contact their charge card issuer before making a major purchase to ask if the amount will be approved.

Recommended: When Are Credit Card Payments Due

How Credit Cards Work

Because they’re more common, you may be more familiar with how credit cards work than you are with charge cards. With a traditional credit card, card holders are given a preset credit limit that’s based on their income, debt-to-income ratio, credit history, and other factors.

Once your account application is approved and you receive a card with a unique credit card number, you can use your card as much or as little as you like — as long as you stay within that limit.

Each month when you receive your billing statement, you can decide if you want to repay the full amount you owe or make a partial payment, but you must make at least the minimum payment that’s due. And if you carry forward a balance, you can be charged interest on that amount. (Similar to your spending limit, interest rates are typically based on a cardholder’s creditworthiness.)

A credit card is classified as “revolving credit” because there’s no set date for when all the money you’ve borrowed must be repaid. As long as you make at least your minimum payments on time and stay within your credit limit, the account remains open, and you can use the available credit over and over again.

Differences Between a Charge Card and Credit Card

Here’s a side-by-side look at some key differences between charge cards and credit cards:

Charge Card vs. Credit Card
Charge Cards	Credit Cards
Full payment required every billing cycle	Can carry a balance, but must make minimum monthly payment
Can be difficult to find and qualify for	Many options available, even for those with not-so-great credit
Accepted by most U.S. vendors (but less so overseas)	Widely accepted in the U.S. and worldwide
No interest charged, but can expect a high annual fee	May avoid annual fee, but interest accrues on unpaid balance
Known for prestigious rewards programs	Many cards offer rewards, often without an annual fee
No hard spending limit	Hard pre-set spending limit

Payment Obligations

With a charge card, you’re required to pay what you owe in full when you receive your monthly billing statement. With a credit card, on the other hand, you can make a full or partial payment, but you’re only required to make a minimum monthly payment.

Even if you’re waiting for a refund that hasn’t yet shown up as a credit on your statement, you’ll be expected to pay the full amount of your charge card bill. With a credit card refund, you’ll just have to make sure you pay at least the minimum amount on your current bill.

Availability

If you’re looking for a new card, you’ll find there are far more credit cards available than true charge cards these days. Even American Express, the only major card issuer that still offers charge cards, has gone with a more hybrid approach.

American Express still offers cards that don’t have a preset spending limit. But those cards now come with a feature that — for a fixed fee — allows a card holder to split up eligible large purchases into monthly installments.

There also are some fuel cards, typically geared toward businesses, that are true charge cards.

Credit cards also are generally easier to qualify for than the charge cards that are available. Even if you have a poor or limited credit history, you may be able to find a secured or unsecured credit card that suits your needs.

Acceptance

Whether you shop local most of the time or hope to use your card as you travel the world, you may want to look at the acceptance rates of charge cards vs. credit cards.

Your card may not do you much good if you can’t use it where you like. American Express says its cards can now be accepted by 99% of the vendors in the U.S. that accept credit cards. If you aren’t sure your favorite local boutique or grocer will accept a particular card, you may want to ask or look for the card’s network logo in the store window.

If you plan to use your card overseas, you may want to check ahead on the acceptance rate in that country and also find out if you’ll have to pay a foreign transaction fee. Charge cards tend to have a lower rate of acceptance overseas.

Costs

If you’re trying to decide between a charge card vs. a credit card, how much a credit card costs compared to a charge card — both in interest charges and fees — could be an important consideration.

Interest

You can find a full explanation of how your card issuer calculates interest in your card’s terms and conditions. But as noted above, if you carry forward a balance on your credit card, you can expect to pay interest on the outstanding amount.

According to the Federal Reserve, the average credit card’s annual percentage rate (APR) is currently around 22.8%. Your rate may be higher or lower, depending on your creditworthiness.

You may not have just one interest rate associated with your account either. Your account may have a different APR for purchases, for example, than for credit card cash advances or balance transfers. Or you might have a lower, introductory APR for the first few months after you get a new card. If, over time, you miss payments or make late payments, the card issuer also could decide to raise your APR.

Because you don’t carry a balance with a charge card, you don’t pay interest. But if you pay off your credit card balance by the due date every month, you also won’t have to worry about accruing interest on a credit card account.

Annual Fees

You won’t pay interest with a charge card, but you may end up paying a significant annual fee just to own the card. (The annual membership fee for an American Express Platinum Card, for example, is currently $695.)

Some credit cards also charge annual fees, but you can find many that don’t.

Rewards and Perks

You may decide it’s worth paying a higher annual fee to enjoy the extra benefits some charge cards offer. American Express, for example, has a reputation for offering its card holders prestigious perks, including travel and retail purchase protections, early access to tickets for concerts and other entertainment events, and special offers from partner merchants.

However, plenty of credit cards also come with special benefits, such as cash back rewards, travel rewards, retail discounts, and more. And many of those card issuers don’t charge an annual fee.

Both charge card and credit card issuers also occasionally offer generous welcome or sign-up bonuses to new card holders, so that might be another benefit worth looking at when you’re searching for a new card.

Before you sign up for any card to get the perks it offers, though, it can be a good idea to step back and assess whether it’s worth paying a higher annual fee (or accruing interest on a balance you can’t pay off) to reap those rewards.

Spending Limit

With a credit card vs. a charge card, you’ll know exactly how much you can spend, because your credit card will come with a pre-set limit. You can go online or use an app to check your credit card account at any time to see how much available credit you have.

Charge cards don’t have hard spending limits. But that doesn’t necessarily mean you can use your card to buy a car or take a trip around the world. Your card issuer may decline a charge if you’re spending more than it thinks you can afford.

How Card Choice Can Impact Your Credit Score

When it comes to what a charge vs. credit card can do for (or to) your credit score, there are few things you should know.

Inquiries

Whether you’re applying for a charge card or credit card, you can expect the card company to run a hard inquiry on your credit. This could temporarily lower your credit score, but usually only by about five points.

Payments

Whether you use a charge card or a credit card, paying your monthly bill on time is critical to building and maintaining a good credit record.

Payment history makes up 35% of your FICO® credit score, so consistency is key. If your payment is 30 days or more past due and your card issuer reports it to the credit bureaus, that negative news could remain on your credit report for up to seven years. And it could come back to haunt you when you try to borrow money to buy a car or house.

Utilization

Credit utilization (the percentage of your available credit that you’re currently using) makes up 30% of your FICO score, so it’s important to keep your credit card balances well under the assigned limit.

To maintain or positively impact your credit score, the general rule is that you should try not to exceed a 30% credit card utilization rate. If you’re using up a big chunk of the pre-set limit on your credit card, it could have a negative effect on your score.

Because charge cards don’t have a pre-set credit limit, it can be difficult to determine if a card holder is at risk of overspending — so neither FICO or VantageScore include charge card information when calculating a person’s utilization rate.

This can have both pros and cons for charge card holders. The advantage, of course, is that you don’t have to worry about negative consequences for your credit score if you spend a lot in one month using your charge card. On the flip side, though, if you have a large amount of available credit that you aren’t using, it won’t do anything to help your score.

Choosing Between Credit Cards and Charge Cards

Deciding whether to apply for a credit card vs. a charge card may come down to evaluating the benefits you’re hoping to get from the card and assessing your own spending behavior. Here are some questions you might want to ask:

•   Does the card offer unique, valuable perks you think you’ll use?

•   If there’s a high annual fee for the card, does it fit your budget and are the card’s perks worth the cost?

•   Do you have enough money, discipline, and organization to ensure your bill is paid in full every month? Or could there be times when you’ll want to make a partial or minimum payment and carry forward a balance?

•   Is your credit score good or excellent? If not, you may have more options and a better chance of qualifying if you apply for a credit card instead of a charge card.

•   If you think you’ll pay off your card’s balance every month, would a credit card still be a better fit because of the rewards, low or no fees, and wider acceptance from vendors?

Also keep in mind that you don’t necessarily have to choose. In fact, you could benefit from owning both a charge card and a credit card. You may find there are reasons to have both types of cards in your wallet.

Recommended: Charge Cards Advantages and Disadvantages

The Takeaway

The terms charge card and credit card are often used interchangeably, but they are not the same thing. A charge card must be paid off every month, so there’s no interest to worry about — but there may be a high annual fee to pay. A credit card allows the user to make a minimum monthly payment and carry forward a balance, but the interest on that balance can add up quickly.

Each individual user must decide which is the better fit for their needs. And a card’s benefits vs. its costs may be a deciding factor.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is a credit card easier to get than a charge card?

Because these days there are more companies issuing credit cards, it may be easier to find one that suits your needs and has qualifications you can meet — even if you have a poor or limited credit history. There are very few charge cards available anymore.

Does a charge card build credit better than a credit card?

Both a credit card and a charge card can help or hurt your credit score, depending on how you use it.

When do credit cards charge interest?

Most credit cards come with a grace period, which means the credit card issuer won’t charge you interest on purchases if you pay your entire balance by the due date each month. If you fail to pay the entire amount on your statement balance, however, or if you make your payment after the due date, interest charges will likely appear on your next monthly statement.

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Photo credit: iStock/9dreamstudio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Credit card companies typically report to the credit bureaus monthly. This usually happens at the end of your card’s monthly billing cycle, also known as your statement or billing cycle date. Credit card companies typically spread statement dates throughout the month, so your date may not be the same as your significant other’s or your best friend’s.

The credit reporting bureaus then use this data to update your credit score. Here’s a closer look at how payments are reported to the credit reporting bureaus as well as how factors like on-time payments can affect your three-digit score.

How Credit Card Payments Are Reported to Bureaus

Credit card issuers typically report to credit bureaus on your regular billing cycle date. Each credit card may report at different times, and they may report to some of the major credit bureaus and not others. Reporting is up to the lender’s discretion, so it is also entirely possible that they won’t make a report at all.

Credit bureaus, such as Experian^®, Equifax^®, and TransUnion^®, may collect a variety of information, including:

•   Personal information, such as name, address, date of birth, Social Security number, and employer

•   Credit account information, such as balances, payments, credit limits, credit usage, and when accounts are opened or closed

•   Credit inquiries

How Credit Scores and Reports Are Updated

The credit reporting bureaus will generally update your credit score as soon as they receive information from your credit card company. That means that your credit score could change relatively frequently as you make credit card charges, especially if you have multiple credit cards.

Also, because credit card companies only report credit activity periodically, there can be a bit of a lag in how long it takes for a payment to show on your credit card report. When you read your credit report, it may not match your current account balances, instead reflecting the last information reported to the bureaus. This situation may be particularly irksome if you’ve paid off debts in hope of building your credit score. Fortunately, your information should be updated during the next reporting period.

However, if you notice that no changes are made after a number of months, it’s worth contacting your lender to make sure changes are reported correctly. If they can’t resolve it, you can contact the credit bureau.

Recommended: Charge Cards: Advantages and Disadvantages

How Credit Card Balances Affect Credit Score

Credit reporting bureaus may collect information about your credit card balance. There is a popular misconception that carrying a credit card balance from month to month will help you positively impact your credit score. However, this is a myth. In fact, carrying a balance can actually hurt your score.

An unpaid balance is not necessarily seen as a bad thing. However, credit utilization — how much of your available credit you’re using — can have an impact on your score. If your balance exceeds 30% of your borrowing limit, it may have a negative impact on your score. Those who keep their credit utilization below 10% tend to have the highest credit scores.

It’s best to pay off your credit card balance each month to protect your credit score and to avoid racking up costly interest charges, which can cause your credit card debt to balloon.

How Applying to Credit Cards Affects Credit Score

Before you apply for a credit card, it’s important to know the difference between a hard and soft inquiry. When you apply, you will trigger what’s known as a hard inquiry when a lender requests to see your credit report.

In contrast, a soft inquiry occurs when you check your own credit or use a credit monitoring service, for example. Hard inquiries will generally have a negative impact on your credit score (though often only by several points temporarily), while soft inquiries will not.

Hard inquiries suggest that you are in the market for new credit. That may seem like a no-brainer. But in the eyes of other lenders, a hard inquiry suggests that you may be in some sort of financial stress that makes you a bigger risk for borrowing money. This is especially true if you have many hard inquiries in a short period of time.
Luckily, the hard inquiry’s effects fade relatively quickly.

In general, it’s wise to avoid causing many hard inquiries in a short period of time. There are some exceptions to that rule. If you’re shopping for a mortgage, auto loan, or new utility providers, multiple inquiries in a short period — typically 14 to 45 days — are usually counted as just one inquiry.

How On-Time Payments Affect Credit Score

Your payment history is one of the biggest factors that goes into calculating your credit score. As a result, making payments on time is one of the best things you can do to maintain a strong credit score or to positively impact your score.

Even a single late payment can have a negative impact on your score, though the missed payment likely will not show up on your credit report for 30 days. If you can make up the payment within that time period, your lender may not report it, though you may still be subject to late penalties.

It’s also important to understand that if you only make a partial payment, that will still usually be counted as late and reported as such to the credit bureaus.

To make sure that you pay bills on time, consider setting up a budget to help control your spending. You might also automate your payments to ensure you don’t miss any payment due dates. But if you do so, make sure that you have enough money in your account to cover your credit card balance.

Recommended: When Are Credit Card Payments Due?

The Takeaway

The credit reporting bureaus collect all sorts of financial information from your various lenders to create your credit score. Your credit card company likely reports your card activity about once a month, on your statement or billing cycle date. Understanding what information has an impact on your score, as well as the impact of on-time payments and credit inquiries, can help you keep your score as high as possible and help keep credit card costs down.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What time of the month do creditors report to credit bureaus?

Creditors may report to the credit bureaus at any time of the month, though credit card companies will usually make their reports at the end of the billing cycle, or on your statement date.

How often do companies report credit?

Credit card companies usually report to the credit bureaus once a month. However, they do so at their own discretion.

How long after paying off debt until you see an impact on your credit score?

Your credit score should see an impact after paying off a debt as soon as that debt payment is reported to the reporting bureaus, usually within 30 days. If your payment doesn’t show up on your report after a few months, contact your lender to make sure it was reported correctly.

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Photo credit: iStock/iamnoonmai

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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With the rise of online payments, checks aren’t nearly as ubiquitous as they used to be. But this form of payment hasn’t disappeared. You may get a government check with your tax refund, a rebate check from a company, or an expense reimbursement check from your employer. Plus, in order to make an online payment, you‘ll need to look at your own checks to determine what your routing and account numbers are.

The upshot: Even in the digital age, it’s important to know how to read a check. Here’s a simple guide to help you find any info you need on a check.

The Routing Number

Your routing number is the first series of nine digits listed on the lower left corner of a check. This number identifies the bank where your checking account is held and reduces the chances of miscommunication in financial transactions. Even if two banks have similar names, they’re distinct from one another because of their different routing numbers.

You’ll need to know your routing number to set up direct deposit at work, transfer money into your account, and make a bill payment.

The Account Number

Your bank account number can be found on the bottom of your checks and is the second set of numbers, just to the right of your routing number. It’s usually between eight and 12 digits long (though it can be longer).

Bank account numbers are used to identify a bank account. The one listed on your checks is the number assigned to your checking account. If you also have a savings account at the same bank, it will have a different number.

If you don’t have access to a check, you can find your bank account number on your statement or by logging into your account.

Check Number

The check number is typically located on the upper right-hand corner of a check, though it can sometimes be found at the bottom of the check after the symbol at the end of your account number. It’s usually three or four digits long.

Checks are numbered in ascending order, so you can easily keep track of checks that you’ve written. When you write a check, it’s a good idea to note the check number and the amount in your check register. This will help you keep the account balanced and avoid accidental overdrafts.

Pay to the Order Of — Payee Line

This line is located in the middle of the check and where the name of the person or business being paid is written. When endorsing a check you’ve received, it’s important to sign your name as it appears on the payee line.

It is possible to write a check to yourself. In that scenario, you would simply add your name in the payee line. This is one way to move money from one bank account to another. You can also write “cash” in the payee line. In this case, anyone can cash the check.

Date Line

The date line is usually located in the upper right area of a check. It’s where you add the date you wrote the check.

If your cash flow is tight, you might be tempted to write a future date in this line, so the recipient doesn’t cash the check until there are available funds in your account. However, know that as soon as you write and sign a check, the recipient can cash it immediately — even if you post-dated the check.

Payment Amount in Numbers

The payment box appears to the right of the “pay to the order of” line, and where you write the dollar amount the check is written for in numeric form, including both dollars and cents. For instance, if the check is for three hundred dollars, you would write “300.00.”

Payment Amount in Words

Below the payee line is a space for the check issuer to write the payment amount in word form. Cents, however, are written in numbers. For example, a check for “$500.25” it’s written out as “Five hundred dollars and 25/100.” If there are no cents, the issuer might write XX/100.

The payment amount in words needs to match the payment amount written in numerical form in the payment box. If these amounts don’t match up, the check can still be cashed, but the bank will only honor the amount that is written out in word form.

Fractional Bank Number

The fractional bank number often goes unnoticed, as it’s typically printed in a smaller font size and isn’t of much importance today. You can find this number towards the top right of your check and it’s listed in two parts — a numerator, then a slash, and a denominator, thus a “fraction.”

A fractional bank number identifies the bank where your checking account is held, but, since the same information is included in your routing and account numbers, it’s not used much anymore.

Your Information

If you’re writing a check, your personal information is located at the top left of the check. This includes your name on the first line, your address in the next few lines, followed, in some cases, by your phone number.

If your checks have an outdated address printed on them, don’t worry — you can still use them. Financial institutions use routing numbers and account numbers to identify where they should pull the money from, not your personal information written on the top left of your check.

Recommended: A Guide to Ordering Checks for Less

For/Memo

The memo box is housed at the bottom left corner of the check and typically begins with “for”. This space gives you an opportunity to briefly note the purpose of the payment, or maybe add a personalized message to the recipient. For instance, you might write “June rent” or “Happy Birthday Sally.”

Signature

The line on the lower right area of a check is where you sign your name. Your signature needs to match the one the bank has on file. If you accidentally sign with a shortened first name or nickname (such as Jon versus Jonathan) or with your maiden name versus your current last name, the bank might refuse to process the transaction.

Bank Name/Logo

The bank name and logo is usually located above the memo box. This tells where the checking account is held. It also adds an additional layer of security. If you receive a check where the logo looks slightly off, or you’ve never heard of the bank listed here, it’s a tipoff that the check might be counterfeit.

Endorsement Line

The endorsement line is located on the back of the check and is usually on the right side. This is where the check recipient, or payee, provides their signature. Without proper endorsement, the bank won’t process the check.

If you’re endorsing a check for a mobile deposit, you may need to write “For mobile deposit only” (or similar wording) under your signature, or check a box labeled “for mobile deposit.” Rules vary by bank.

The Takeaway

While checks aren’t as common as they used to be, you may still receive and write checks. You’ll also likely need to refer to your checks to find important details about your account, such as your routing and account numbers. You’ll need these numbers to sign up for direct deposit or set up an electronic payment or funds transfer.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

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Photo credit: iStock/AndreyPopov

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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There are many reasons why you might end up accidentally depositing a fake check into your bank account. Scammers often use fake checks as part of various schemes to steal money from unsuspecting victims. They may send you a fake check and ask you to deposit it, then request that you send them a portion of the funds back, claiming it’s for fees, taxes, or some other reason. By the time the bank realizes the check is fake, you’re left responsible for the full amount.

Why do these scams work? The fake checks generally look just like real checks, even to bank employees, with appropriate watermarks, and they may appear to be issued by legitimate financial institutions.

Here’s a closer look at what happens if you accidentally deposit a fake check, plus ways to spot counterfeit checks.

Consequences of Depositing Fake Checks

If you accidentally deposit a fake check, everything may be fine at first. By federal law, the bank must make the funds available to you within one or two business days. When the funds are made available in your account, the bank may say the check has “cleared,” but that doesn’t mean it’s a good check.

Fake checks can take weeks to be discovered and sorted out. When the bank realizes the check is fake (often after you’ve spent the money or given it to someone else), here is what happens:

•   You have to cover the cost of the check. The bank will typically debit your account for the amount of the fake check, and may also charge you a processing fee.

•   You’ll lose any money you sent to the scammer. While in some rare cases you may be able to request a chargeback on a fraudulent transaction, it’s unlikely that you will be able to get any money back once you’ve given it to a scammer.

•   You may have to pay overdraft fees. If you spent the check amount before the bank realized it was fake and debited your account for the amount, it’s possible your account could get overdrawn. In that case, you could face overdraft fees, which can run $30 to $35 per transaction.

•   You may have to pay late fees. If you aren’t able to pay your bills because of insufficient funds after depositing a bad check, companies may charge you late fees.

•   Your bank could close or freeze your account. Banks will often freeze or close accounts for suspicious activity, including attempts to pass off bad checks. You’ll want to check your bank deposit account agreement to see in what scenarios your bank can close your account.

•   It could hurt your credit score. If you relied on the check to pay upcoming bills, you might miss their due dates. Because payment history is the biggest factor credit bureaus use to determine your credit score, missed payments can do damage to your credit.

•   Your banking history could be tarnished. The bank may report the fake check incident to the banking reporting agency ChexSystems. If so, the agency will then record that information in its files about your checking history. Banks and credit unions may use that information to determine whether to allow you to open a bank account in the future.

Can You Go to Jail for Depositing Fake Checks?

Whether or not you’ll face criminal charges (and potential jail time) for depositing a fake check will depend on whether or not you knowingly deposited a fake check, as well as the laws in your state. If you are simply the victim of a scam, you likely won’t face criminal charges or jail time.

Knowingly committing check fraud, however, is a serious crime that can result in significant fines and even jail time. In Indiana, for example, the lowest level of check fraud is a misdemeanor, which can lead to imprisonment for up to one year and a fine of $5,000. If the amount on the check was between $750 and $50,000, you will instead be charged with a felony. The potential sentence for this is six months to two- and-a-half years in jail, plus up to a $10,000 fine.

If you are convicted of a check fraud felony in New York State, on the other hand, it could mean up to seven years in prison.

Recommended: How Long Is a Check Good For?

6 Tips to Spot Fake Checks

Counterfeit checks can look incredibly real, making them difficult to spot without careful examination. To protect yourself from falling victim to check fraud, it’s important to know how to identify a counterfeit check. Here are six tips to help you spot a fake.

1. Feel the Edges of the Check.

If the check is legit, it should have one perforated edge (where it was ripped from a checkbook). A check that is smooth on all sides is a tipoff that it’s a fake.

2. Examine the Paper

Genuine checks are usually printed on high-quality paper with intricate designs that are hard to replicate. Hold the check up to the light to see if it has watermarks or security threads. Genuine checks often have these features, while counterfeit checks may appear flat and lack these security measures.

3. Check the Bank Information

Verify that the bank’s name and logo on the check match the ones used by the actual bank. You can do this by visiting the bank’s official website or calling their customer service hotline. You can use an online tool like BankFind to check if a bank is backed up by the Federal Deposit Insurance Corporation (FDIC).

4. Scrutinize the Check Amount

Be wary of checks that have unusually high or round amounts. Scammers often use these amounts to make the check look more appealing. If you receive a check for an unexpected amount, it’s a good idea to contact the issuer directly to verify its authenticity.

5. Look for Typos

Counterfeit checks often contain spelling mistakes, grammatical errors, or inconsistent fonts. Carefully review the check for any such errors, as they can indicate that the check is fake.

6. Be Wary of Pressure Tactics

deposit the check quickly. They may claim that the check is a limited-time offer or that you must act fast to receive a prize or reward. Take your time to verify the check’s authenticity before taking any action.

💡 Quick Tip: If your checking account doesn’t offer decent rates, why not apply for an online checking account with SoFi to earn 0.50% APY. That’s 7x based on FDIC monthly interest checking rate as of December 15, 2025. the national checking account average.

What if Someone Else Deposits a Fake Check Into Your Account?

If someone else deposits a fake check into your account, the situation can be complex and you’ll want to take prompt action to mitigate any potential negative consequences.

As soon as you become aware of the fraudulent deposit, contact your bank to report the issue and give them all the relevant details, including the date of the deposit, the amount, and any other information you have about the check. It’s also a good idea to ask your bank to place a hold on your account to prevent any further transactions from occurring until the situation is resolved. This can help prevent additional fraudulent activity.

As your bank investigates the fraudulent deposit, they may request documentation to support your claim that the deposit was fraudulent, such as copies of the fake check, any communication you have had with the person who deposited the check, and any other relevant information.

Going forward, you’ll want to take steps to protect your account from further fraudulent activity. This may include changing your online banking passwords, setting up alerts for suspicious activity, and being cautious about sharing your account information.

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The Takeaway

Check fraud is just one of the many ways that scammers con people into giving them money. If you unknowingly deposit a fake check into your account, the consequences include fees and, possibly, a negative mark on your banking history and the closing of your account. To avoid being scammed, look for the signs of a fraudulent check, and avoid cashing a check that you weren’t expecting, or for more than the agreed-upon amount.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Can you get in trouble for accidentally depositing a fake check?

Yes, you can potentially get in trouble for accidentally depositing a fake check. While an accidental deposit may not lead to legal consequences, you may get hit with bank fees, you’ll need to repay any amount of the check you spent, and the bank may put a hold on your account. It’s crucial to cooperate with your bank’s investigation and take steps to rectify the situation promptly.

Is the bank responsible for cashing a fake check?

Generally, banks are not responsible for cashing a fake check if they can demonstrate that they followed proper procedures and exercised reasonable care in processing the check. However, if the bank is found to have been negligent or failed to detect obvious signs of fraud, they may be held liable for cashing a fake check. It’s important to review your bank’s policies and procedures regarding check deposits and fraud prevention.

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Photo credit: iStock/AndreyPopov

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
This article is not intended to be legal advice. Please consult an attorney for advice.

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Sadly, mobile banking and check fraud are on the rise, as scammers come up with new ways to try to trick people out of their money. One such tactic is mobile deposit scams, which involves your unwittingly depositing a fake check through a mobile deposit. The scammer either convinces you to reveal personal information or to send them money from your account. By the time you realize what is happening, your money is gone or your sensitive information could be used for ill intent.

To protect yourself, read on.

What Happens if You Mobile-Deposit a Fake Check?

Before talking about fake checks, it’s important to first define what a mobile deposit is.

•   It’s a type of deposit can be done through your bank or credit union’s app.

•   You snap a photo of a paper check with your mobile device, upload it plus information about its amount and which deposit you want it submitted to.

•   Once the bank processes and approves it, the check will be deposited in your checking account.

With mobile deposit scams, however, one of two things might happen:

•   The scammer might convince you to deposit a fake check, often for more than the amount you were told would arrive. Then the fraudster might ask you to return the “extra” amount they said they accidentally sent you (which you do, not knowing the check they sent is bogus).

•   The scammer asks for your personal information so they can deposit money into your bank account (which they’ll never do).

If you deposit a fake check, whether through your bank’s mobile app or another means, there are several scenarios that can unfold.

•   The bank may deny the deposit and declare the check is fake.

•   The bank may clear the check, and there is a deposit in your account. However, that doesn’t mean the bank won’t come back around and discover the check is fake. In this case, the check bounces, and you’re responsible for paying the amount back to the bank.

In either case, you could be held liable for the fake check and any extra costs that the bank may have incurred because of this bank fraud. The authorities may even be involved if there is a criminal investigation for the fake check.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Tips for Spotting a Fake Mobile-Deposit Check

There are several ways you can use to spot a fake check or attempt to verify a check, such as:

•   Considering the sender: If you’re unsure who sent you the check, it’s best to double-check why you received the check. If, say, it’s from your bank or a company you do business with, you can contact their listed business number and find out why it was sent vs. just depositing the check.

•   Looking at the check amount: Fraudulent checks typically are for an amount that’s much larger than the payment you expect to receive. The idea is to get you to return the extra amount. For checks that have seemingly a larger amount than expected, contact the sender to correct it, which they should do if they are legitimate. (You may hear the practice of intentionally writing checks against insufficient funds referred to as check kiting.)

•   Check the financial institution: Fake checks may look legitimate but have a bank or credit union name that doesn’t exist. You can do a simple online search to find the name of the financial institution, or contact the FDIC to determine if the bank is real.

•   Determine the quality of the check: Look at the check to see if there are any watermarks or other indicators of security features typical of a real check. Feel the paper as well, as real checks are typically printed on thicker paper than bogus ones.

4 Mobile-Deposit Scams to Avoid

Unfortunately, there are many tactics that scammers try to use to get you to part with your money. Four common mobile check-deposit scams include fake jobs, bogus contests, fraudulent sales, and dating scams.

Fake Jobs

Here’s how this typically goes:

•   You answer an advertisement for a job, like a mystery shopper, personal shopper, or some other form of employment.

•   You apply, are hired, and are sent a check — an upfront payment for work, for example — for a larger amount than you were promised and are asked to send the excess amount back.

•   You deposit the check, send the excess back, and then find out that the check you were sent has bounced. You are liable for that “excess” you sent back.

•   Or you’re asked to review, say, a company that sells money orders or wire transfer services. You receive a check from the scammer to be used to purchase money orders and/or send a wire transfer.

•   You deposit the check, make the purchase as directed, and send a money order or wire transfer to someone else’s savings account. Then, guess what? The check winds up bouncing, and you’re out of cash.

Fake Contests

This scam usually unfolds as follows:

•   Someone posing as a representative of a company or lottery contacts you to let you know that you’ve won a contest.

•   You may not remember entering the contest (because, as it turns out, you didn’t), but you give the rep some personal details so they can send the check.

•   Once you receive the check, the scammer tells you they sent too much money and asks that you send the excess amount back to them. You deposit the check and return the overage.

•   The check turns out to be fake (how long for mobile deposit or in-person checks to bounce? It can be a couple of days or longer). That means the alleged excess that you returned is your cash that’s now disappeared.

Auction or Online Marketplaces

Selling your stuff on websites or in-person can lead to scams:

•   You’re selling some items on an online marketplace (say, eBay, Craigslist, or Facebook Marketplace), and the scammer purchases it from you.

•   The scammer gives you a check for an amount that’s higher than your item’s listed price and asks you for the overpayment back. You send the money back, and later find out that the check is fake. Meanwhile, the scam has made off with your money.

Dating Scams

These types of scams can take a long time to unfold:

•   The scammer creates a fake profile on a dating app or social media and strikes up a conversation.

•   Over time, this person may win your trust and then face an emergency or some other situation for which they need to borrow money. (Maybe they need funds to buy a plane ticket to eventually visit you.)

•   You agree to lend them some money, which they say they will soon return via check. Yes, you receive the check from them, but it ends up being a fake one, and the money you “loaned” the fraudster is gone.

What to Do if You Receive a Fake Mobile Deposit From a Stranger

If you believe you’ve received a fake check and are unsure whether to deposit it via your mobile app, pause.

•   Double-check with the sender if possible whether the payment is legitimate.

•   If you were expecting a payment and they send more than the anticipated amount, ask the sender to void the check and send you the correct amount. If there’s no response or a refusal, don’t deposit it.

•   Don’t draw against the potentially fake check until you are sure that it’s fully cleared. Don’t assume that just because the amount shows up immediately in your bank account that you can go ahead and spend it.

•   You can also contact the Federal Trade Commission (FTC) if you believe someone is targeting you for a fake mobile deposit scam.

The Takeaway

You can’t control what scammers do, but you can control how you respond to them. By learning how to spot signs of fraud, including mobile deposit fake checks, you can protect yourself from romance, job, and other ploys. By educating yourself and being wary, you may prevent someone from taking advantage of you and your money.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What happens if you mobile-deposit a fake check?

If you submit a fake check through mobile deposit, the bank may either reject it right away or accept the form of payment. However, even if the bank accepts it and conditionally credits it to your account, when the check is later found to be fraudulent, the amount will be debited from your account.

How do you know if a mobile deposit check is real?

You can inspect a check by seeing if there are certain security features like watermarks and seals. You can also see if it has heavy paper (like most checks you have deposited) or whether it’s on thinner stock. Also double-check online if the bank the check is drawn on is real.

Can you go to jail for mobile-depositing a fake check?

If you knowingly, intentionally mobile-deposit a fake check in an attempt to deceive a bank, you may face criminal consequences.

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Photo credit: iStock/RyanJLane

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

This article is not intended to be legal advice. Please consult an attorney for advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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