Learning About Finance and Money

Answers You Need Before Using A Check Cashing Service

26 February 2016

Jordy De Pijper

Whether just for the sake of convenience or because you don't have access to your regular bank for some reason, a check cashing service can do a lot of good in certain circumstances. No two companies handle the process the same way, so it's important you clarify certain facts before you hand over an endorsed check. Armed with this information you'll be able to make an educated decision whether or not to do business with a particular provider.

Nothing is Free

For most people, using a check cashing service is a convenience used in lieu of cashing a check through a regular bank. Anything convenient usually also has fees associated with it, and cashing a check with a third party is no different. Avoid services that ask for a percentage of the check's value, and stick with flat fee services. Flat fee services usually have a limit to the size of the check they'll cash, but you'll keep more of your money.

Another common service offered by check cashing services are cash advances on post-dated checks. These are effectively cash loans with higher interest rates, so pay attention to both the rate and any fees on these services. Sometimes a quick cash infusion is necessary to help cover unexpected expenses, but that doesn't mean you should have to continue paying for it years later.

Finding a Bargain

Check cashing services are one of those things that you can get away with shopping around for the best deal without worrying whether or not you're sacrificing quality in the process. Start by calling local grocery stores or any retailer with a customer service counter. Many will cash checks for smaller amounts and only require a flat fee for the privilege, so look for the lowest price in town on these services. Often these fees are just a few dollars, which is a small price to pay for the ability to cash a check on Sunday or late on a Saturday when your bank isn't open.

Another common practice which is sometimes represented as a flat fee is assigning a fee for every $100 cashed out, or some other arbitrary amount. This is often found at locations that don't place a limit on the amount of the check being processed, but in order to make it worth their while they'll charge a separate fee for each additional denomination. For example, a $3 fee on every $100 doesn't seem like much, unless you're cashing a tax return check for several thousand dollars, which adds up quickly.

No matter why you're seeking out the services of a check cashing facility there are important things to be aware of first. Even if you're in a hurry to get cash in your hand it's still worth taking a moment to evaluate each available provider, and make sure you're not overpaying for a common service. To learn more, contact a company like Bridge Capital Solutions Corp. 

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