When Is Check Cashing Appropriate?

Check cashing is most appropriate for those who are frustrated by their experiences with typical banks or credit unions, and can handle their funds appropriately without the aide of checking or savings accounts. Whether you have had enough of rising fees or simply haven’t been able to get the service you want from your local branch, check cashing is an alternative that might work for you.

Check cashing is an alternate form of money management. As with any other form of personal finance, it will only work when the consumer uses it responsibly and in the right circumstances. Check cashing isn’t for everyone, and you should think carefully before using check cashing as a month-to-month substitute for or addition to standard banking.

Here are few things to consider:

Service Fees
With every check cashed at your local provider, you will be charged a service fee, much like you would with a payday loan. These fees are one-time, flat, and disclosed up front. With check cashing there are no confusing or deceptive charges — just one rate. In most cases, these charges will be less than the cost of an overdraft or bounced check fee at your standard bank. However, these charges will apply each time you cash a check. Consider whether or not you can afford to have that amount deducted from your total each time.

Personal Responsibility
Unlike a checking or savings account, once your check is cashed, the full amount minus the fee is in your hand. It’s up to you to handle it in the most responsible way possible. Most check cashing providers will offer you the option of putting an amount onto a prepaid debit card, or paying your bills in-store. But some may not. Be honest with yourself when considering if you’ll handle your funds responsibly before using check cashing services on a month-to-month basis.

Choose a Trustworthy Provider
As with any alternative solution, there are check cashing providers who strive for honesty and integrity in their relationship with you, and some who do not. It’s very important to know who you’re dealing with when you’re cashing your check. Look for affiliation with industry advocates such as the Financial Service Centers of America (FiSCA) or the Community Financial Services Association of America (CFSA). Make sure you feel comfortable in the store and with the employees. Our check cashing provider guide will help to determine which check cashing provider is right for you.