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Getting paid is always worth celebrating, but where do you go to turn that celebration into actual cash? For around 6 percent of adults in the U.S., the answer is not a bank or a credit union. This small portion of the population is often known as the unbanked, which means they do not have a traditional checking or savings account. Instead, they have to explore other ways to cash their checks and turn written amounts into real dollars.
What is a check-cashing service?
While you iliar with a check-cashing service, you’ve likely passed by one of these places that will happily handle your check needs. They often have signs that advertise their check-cashing ability, along with payday loans, wire transfers, money orders and other financial transactions. According to the trade association that represents many of these places, Financial Service Centers of America (FISCA), there are more than 13,000 locations across the country. A lot of people put a lot of money through them, too. FISCA’s data indicates that they serve more than 30 million customers each year and cash more than $58 billion of checks.
How does a check-cashing service work?
Check-cashing services offer instant access to cash. While depositing checks in a traditional bank account often includes a processing time where the funds may be available the following business day or a few days later, you can take your check into one of these service centers, show them your government ID and walk out with the money a few minutes later.
The convenience of speed comes with a cost, though. Check-cashing services charge a fee for each transaction. That fee will vary depending on where you cash your check and what type of check you hand over. Consider some of these check-cashing costs.
- Moneytree – 1.99 percent of the payroll check amount, plus a $1.49 fee if it’s more than $20
- Amscot – Tiered system for local payroll checks, starting at $3 and ranging to $ for a check just under $1,000; 2 percent of the amount for anything larger
- PLS – 1 percent of the check amount + $1 for in-state payroll checks and government benefit checks; all other checks are subject to a 2.25 percent fee.
While many locations display their fees next to the cashier window, tracking down the fees you’ll pay for cashing a check before actually going to the retail location can be tough. Some of the biggest names in the business – ACE Cash Express and United Check Cashing, for example – do not readily list the fees for their services online. To eliminate confusion, you could skip visiting a standard check-cashing outlet and take your check somewhere you may already be visiting for other needs.