If you are willing to make a large purchase, and you do not carry credit cards or cash with you, then a private or public seller may ask you to pay by bank draft. This term is more commonly used in the UK as compared to the US, where it is roughly equivalent to the word cashier’s check. Essentially, a genuine bank draft or cashier’s check is guaranteed up to a certain amount of money.
Guarantee of Payments to seller
When you withdraw funds from your account in order to get a cashier’s check, then you are essentially purchasing the bank draft. Once that you’ve purchased the cashier’s check, or money order, then the money in your account is gone and you can not spent it on other things. This can provide an extra security to the person selling you something, because it can guarantee that your check will not bounce.
ATM or credit card instead of bank draft
As so many people are now banking with ATM cards so the face of the bank draft, cashier’s check or money order is changing. Further, there exist a software that can automatically deduct funds from your bank account.
In retail locations this is increasingly in use, and there are chances that at some future point it may become standard. So due to only few reasons why you might need to use a bank draft instead of a standard check or an ATM or credit card.
Still the Bank draft is used instead of ATM cards in some cases
If instead of a store or a large company you’re purchasing or renting something from an individual, and that individual is not likely to have the means of determining whether a personal check is valid, and probably doesn’t have the ability to take credit card or ATM transactions then in this case you have to use a bank draft.
If you get a bank draft then you may at the least gets a record of a transaction, whereas cash does not. It can cost a little money to purchase a cashier’s check, usually a couple of dollars per hundred US Dollars (USD) withdrawn.
Bank drafts Scams
In recent years there have been some unfortunate scams that have involved bank drafts that are phony. Since printers are now so much capable of creating much realistic appearing checks, that people have been fooled into taking bank drafts that don’t truly have any value.
How to avoid Bank drafts Scams?
In order to avoid such happenings, you might want to accompany the buyer to his or her bank in order to see the bank draft written out, or you might ask for a cash payment instead of a bank draft. Another way of avoiding such mishaps is by calling the bank from which the draft originates and verify that the draft is indeed real. If you’ve never heard the bank name before, then instead of using the number on the check get the phone number independently from your telephone operator or phone book.
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