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Check Cashing Stores Expand Their Services to Poorer Areas

No matter how you may feel about it, check cashing stores are becoming more and more common throughout the United States. While these establishments can now be found just about anywhere, they are particularly prominent in poorer areas, a fact that is heavily criticized. Many think that check cashing facilities prey on the poor and uneducated and take advantage of their economic situations by charging outrageous check cashing fees. A lot of the criticism lodged against these stores, however, springs from misunderstanding of what these companies are all about and how they actually function.

The Basics of Check Cashing Services

While every check cashing service is different, most do have a few things in common. These establishments, which may be housed in their own buildings or which may be a part of a larger business such as a pawn shop or a grocery store, generally cash a wide variety of checks for a fee. Again, each company will set its own rate, but most charge a small percentage of the check, so the larger the amount of the check, the more it costs to cash it. There are some check cashing facilities, however, that simply charge a flat cashing rate, though these are few and far between. Since it is usually free to cash a check at a bank at which you hold an account, many feel the check cashing rates charged by these companies are unfair. It is important to remember though that not everyone can afford the monthly fees and charges associated with a bank account and, due to past financial mistakes or transportation issues, some can’t use a traditional bank, making these check cashing services their only option.

Do More Than Just Cash Your Check

Most check cashing services actually offer a host of other services as well. In states where it is legal to do so, these facilities may offer payday loans. Payday loans seem like an ideal solution for those who are living paycheck to paycheck and who require funds to get them through to the next payday. As the name implies, the payday loan lender gives the borrower the funds in cash, but mandatory repayments of the loan must begin by the person’s next payday. In most cases, the payment or the full amount due, depending on the agreement, will be taken directly from the borrower’s bank account on a specified date. While it’s easy to see how these loans could easily get out of hand, the smart borrower will find that repayment is manageable and will understand that payday loans should not be used repeatedly or as a long-term solution. Other services typically offered at check cashing facilities include selling of prepaid “credit” cards, notary services, and the selling and cashing of money orders. Some facilities also act as payment centers and will accept payments for water bills, electricity bills, or other commonly paid bills.

The Benefits of Using a Check Cashing Service

Check cashing services are not for everyone and, indeed, they do tend to be more practical for those who have found themselves in some kind of financial difficulty. However, if utilized correctly, individuals can actually use these services to their advantage. They can provide a good way to slowly get back on one’s feet and, if used carefully enough, can eventually lead to financial freedom.


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