Is this a USA thing? As a child of an RAF pilot who moved around a lot (here and overseas), I have never encountered this. My Dad had the same bank account all his life, at the bank in the town he was born in, in the UK, and never (as far as I know) had any problems cashing cheques etc. back when such were things.
Not cashing out of town checks (especially in large amounts) is definitely a thing in the US.
For larger transactions, it is also common to get a "cashier's check", drawn on the bank's own accounts to minimize the seller's counterparty risk.
The rationale for the in-town restriction is also to limit counterparty risk: if the check is from an unfamiliar bank, it is more likely to be bogus and the seller won't be able to verify the account with a quick call to a known bank nor expect to be able to address fraud within the local law-enforcement framework.
I take your word for it, but I rember getting cash on my UK credit card several times when I've worked in the US. Of course, these were for small amounts, and the credit card company were the ones finally at risk.
I have suddenly had a vision of Clint Eastwood, in High Plains Drifter mode, riding into town and attempting to cash a cheque :-)
Credit/debit cards and checks are totally different systems. Cards can be checked for available funds instantly. Checks need to be cleared through the ACH system (in the US at least), which is an asynchronous process that might take more than a day to complete. If you cash a check from a different bank at your own, usually it will actually draw funds from your account and the check will be deposited after it clears.
It's been a long time since I had a cheque book, but way back then the cheque at the bank (not for electricity payments and such) trying to get money needed to be backed up with a bank's card, and the risk was on the card issuing bank.
I'm not familiar with UK banking but this sounds like something lost in translation. The checks the ancestors are speaking of are personal checks, basically just an IOU -- I'm guessing this is more like your "for electricity payments and such". The cashier's check mentioned above sounds to be more like your "cheque at the bank", where the instrument carries value itself, rather than being a draft on the writer's account.
It was. The US has/had a distributed banking system with thousands of banks. It’s archaic and stupid.
Basically, you can tell from the routing number on a check where the bank is. Back in the day, if the bank wasn’t from NYC or the same region they wouldn’t honor the check. Checks were mailed between clearing systems and would take weeks to clear. My dad maintained a bank account at the Bank of New York specifically for business travel in the 80s.
That’s mostly gone now as ACH is automated and quick.
The problem is that the US is rather larger than the UK, so a distributed system was (and maybe still is) a natural fit. For the same reason, all the citizens of the US can't just come to one place and vote for a President, like ancient Athenians could.
I was paid by the Canadian government through a fellowship while I attended graduate school in the USA. They paid my entire years fellowship in a single check which clearly said Government of Canada, however, the check was denominated in US dollars and drawn on a US bank, yet I still got a lot of confusion and difficult when trying to cash it and had to convince them it was, in fact, possible.
