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.

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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.

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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.


Podcast: What is Check Cashing or Cashing of Check / Cheque

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4 thoughts on “What is Check Cashing or Cashing of Check / Cheque?”

  1. It’s good to know that check cashing service is beneficial for people who do not have access to a bank account and need to cash a check immediately. My roommate’s brother would benefit from this information since he’s a freelance artist. I’ll share this with my roommate later so she can pass it on to her brother. Thanks!

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  2. I find it very helpful when you said that one of the advantages of using check cashing services is that you don’t need a bank account when cashing out a check. I won a check for a thousand dollars in a raffle I joined in, and I’m very happy that I won because I really need the money right now to pay for my sister’s heart surgery. That being said, I’ll make sure to find the best company who offers money services in town.

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