How to Use Check-Cashing Service?


Triston Martin

Nov 21, 2023

Consumers who do not have a bank account may cash their checks via check-cashing services. They enable quick access to cash for persons who may be unable to get a bank account or who may already have one but cannot go to their bank when they want money. Investigate how check-cashing services operate, who they benefit from, and how much they cost to assess whether they are a good match for your requirements.

Check-Cashing Service

The use of check-cashing services allows you to cash payroll, government, and other checks without the need for a banking account. The cash is normally accessible within a short period. The Financial Cashing Service Centers of America (FiSCA), a national trade group representing the financial service centers that offer these services, is a good place to start. According to the Financial Services Centers Association of America, roughly 13,000 financial service centers in the United States. More than 350 million transactions in different items are processed via these centers annually, totaling $106 billion in value. These financial institutions have a more restricted range of services than conventional banks.

Procedure for Using a Check-Cashing Service

Approximately 6% of individuals in the United States are "unbanked," which means they do not have a checking, savings, or money market account. There are a variety of reasons why you can find yourself without a bank account, not wanting to pay the costs associated with a regular bank account, or being faced with the closing of a local bank branch. It is often necessary to use other financial services to accomplish fundamental transactions, such as cashing checks, because of this. In 2019, more than half of unbanked people utilized an alternative financial service, such as a check-cashing service, money order, or pawnshop loan, according to the Federal Reserve. Furthermore, 16 percent of individuals were underbanked, which means that they had a bank account and utilized an alternate service in addition to it.

Check-cashing services are available to assist those who are unbanked or underbanked in converting their paychecks to cash at a time and location that is convenient for them (many are open 24 hours a day, seven days a week). They may be found in places throughout the nation. They often charge you a fee for the service they are obligated to disclose, which is typically a percentage of the face amount of the check they are writing.

According to Walmart, starting in March 2022, they would charge $4 to cash checks up to $1,000 and $8 to paychecks beyond $1,000. Even though this is a little percentage of your entire check (0.4 percent or 0.8 percent respectively) some check cashers may charge you more. According to Amscot, government checks are subject to a 2.9 percent fee, tax return checks are subject to a 2.5 percent fee. If you cash a $1,000 payroll check at Amscot, you could pay as much as $45, according to the company. You may lose $1,170 in fees if you utilize the check service to cash 26 paychecks a year. Check-cashing costs take a bite out of your profits. If you need one, use it sparingly and opt for businesses that charge a minimal rate.

The Advantages and Disadvantages of Check-Cashing Services


  • Provide financial assistance to those who are unbanked or underbanked in your community.
  • Ensure that funds are accessible practically quickly.


  • It is possible to charge extraordinarily large fees.
  • It is quite easy to get trapped in a cycle.
  • Consumers may be forced to use non-traditional financial services due to this.

Pros and Cons Explained

Check-cashing services allow clients to cash a check when they would otherwise be unable to do so because they do not have access to a bank account or cannot acquire one at the time of necessity (when traveling or cashing a check after business hours, for example). There's no need to hold your money in a bank account for one or two days to become available.

Check-cashing businesses sometimes demand exorbitant fees, which may significantly diminish the amount of your hard-earned money that you can retain. Check to cash is normally free at banks and credit unions, as long as the account holder does not demand a fee. Check-cashing costs may sometimes become so high that consumers cannot pay for essential expenditures (rent, food, or transportation). To maintain their need for rapid cash, a person may continue to utilize check-cashing services and get trapped in a vicious cycle of debt.

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