What is Check Cashing or Cashing of Check / Cheque?

 

What is check cashing?

Check cashing is a service through which you can get money from the checks given to you, even if you don’t have a bank account. Check cashing services can also provide short-term loans, sell prepaid cards, etc.

Where is check cashing done?

There are many physical locations where you can cash a check, like stores, but there are also some apps through which you can cash your checks.

What are the charges or fees for cashing checks?

The amount a business can legally charge to provide check cashing service varies by state, and is between 1 and 12%. So, for a $1,000 check, you would pay between 10 and 120 dollars depending on where you cash it.

Are there any alternatives to check cashing?

Actually, check cashing is an alternative to using a bank to cash a check! So there aren’t any alternatives to the alternative. But you can always use a regular bank or credit union to cash a check – but only if you have access to one.

What are the advantages of check cashing?

The 2 main advantages of check cashing are the ability to get paid through a check even if you don’t have a bank account, and receiving the money instantly.

Are there any disadvantages of check cashing?

If you were to cash a check at a traditional bank, you wouldn’t incur any fees. So the main disadvantage of check cashing service is the high fee.

So, who should use check cashing service? Should I use it?

Due to the high fees, check cashing should only be used by people who either (a) need the money immediately, and can’t wait for the time it takes a bank to clear a check, or (b) people who can’t use traditional ways to cash a check as they don’t have access to an account at a bank or a credit union.

So if you fall in one of these two categories, then a check cashing service is right for you. On the other hand, if you have access to a bank account and are willing to wait while the check is clearing, then it is probably best if you don’t use check cashing.

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