Check Cashing Services 101
Check cashing is plain and simple encashment of verified checks for a fee. There are a lot of check cashing outlets that provide this service to people who were issued checks and wants to encash it without waiting for the check to clear. Banks actually offer check cashing for free specifically to clients who have bank accounts with them but those who do not have existing accounts resort to check cashing services instead.
Check cashing stores earn profit with every cashed check whether it be secured, unsecured, or government checks. These services can take out a certain percentage of the cash value or charge a flat fee for every service. Once you present your check for encashment, you will be asked to submit identification documents for verification. Clients will then be asked to endorse the check, and the outlet will proceed to pay the amount in cash less the transaction fees. The check cashing outlet will then deposit the amount in their own bank accounts.
Check cashing businesses will usually provide other services like bill payments, payday loans, money orders, and the like. People in need of cash right away can rely on these types of financial institutions so they can get an advance to be deducted from their paycheck. A lot of times, this becomes a vicious cycle for most people because they become dependent on check cashing services for cash advances even when they’re just spending money for unnecessary things.
There are over 10 million households in the United States alone that do not have bank accounts – surprising but statistically accurate. Although some check cashing companies do not accept personal checks, check cashing services are still deemed convenient than going to banks because they can provide quick cash even without a bank account. Check cashing outlets also operate at much longer hours than banks so you can get cash immediately even when banks are already closed.
The fees may be a bit higher though, around 3% to 5% of the check amount than what banks charge but it may be all well worth it because you get immediate access to your funds unlike with banks wherein you will have to wait for the check to clear before the full amount is released. It is recommended to make use of check cashing services occasionally as you tend to be at the losing end when fees add up especially when you seek quick cash ever so often than necessary.
Check cashing outlets mushroom almost everywhere to provide ease and convenience for clients. More so, some people think that check cashing outlets feed at times on the desperation of people to get a hold of fast cold cash; but that is not the case, as it all really depends on the person and not the financial entity that helps you get by. While it is tempting to avail of frequent cash advances than wait for payday, you have to weigh the costs and keep track of your spending to determine if it really is a must to rush to the nearest check cashing service provider or you just need a rehash on budget management.