Check cashing services allow you to access your money without having a bank account. In exchange for a fee, these services allow you to cash your paycheck and other types of checks.
They are a part of the financial services system for millions of unbanked or under-banked Americans. People who are unable to open a standard bank account or who require quick, handy cash may use check-cashing services to access the funds in their paychecks.
However, check-cashing services can be expensive and have drawbacks. It is critical to understand your options before deciding to employ a check-cashing service. We’ll have a review of two prominent check cashing stores: Walmart and ACE Cash Express.
What Are Check Cashing Services?
Check-cashing services are not banks. They provide financial services such as check cashing, money orders, electronic bill payments, and small loans. Some of these businesses also provide payday loans or cash advances.
According to Financial Services Centers of America (FiSCA), the industry trade group that represents these businesses, there are approximately 13,000 neighborhood financial services centers in the United States, providing an estimated $106 billion in financial services to approximately 30 million customers each year.
Aside from stand-alone check-cashing businesses, several shops, such as Walmart, also provide check-cashing services.
What Is the Process of Check Cashing Services?
Check-cashing services will verify your identity, cash your check, and give you the money immediately, less a fee, if you have a paycheck or government check, such as a Social Security check. Rather than putting the check into a bank or credit union account, you walk out of the check-cashing store with cash in hand. Prepaid cards are also available from several services.
When you deposit a check with the bank, the check may take a few business days to clear. The availability of funds for checks is determined by the deposit method. If you’re in a tight financial condition, you might want to get your money as soon as possible. Check cashing services provide same-day, quick cash without having to wait for the banking system to approve the check.
Remember that check-cashing services charge fees for processing checks and are required to disclose these fees upfront. Fees vary depending on the company, the state, the type of check, and the amount of the check. Amscot, a Florida-based financial services provider, charges 2.9 percent to cash government checks worth more than $1,500, 2 percent to cash local computer-generated payroll checks worth more than $1,000, 4.5% to cash payroll checks and handwritten checks, and 9.9 percent to cash personal checks and money orders.
Before using a check-cashing service, it is critical to understand the fees. For example, if a check-cashing business charges a 2% fee to cash your $1,500 paycheck, the price is $30, leaving you with $1,470 in take-home money. If you cash 26 paychecks in a year, you’ll pay $780 in fees. You might be able to avoid those costs if you create a checking account and deposit your wages there instead.
Check-cashing services, as nonbank financial service providers, are valuable for a few sorts of customers:
#1. Individuals who do not have a bank account.
Check-cashing services can be a sort of alternative financial service if you prefer not to open a bank account or if you have any negative history in your ChexSystems file that prevents you from opening a bank account.
#2. People in urgent need of money.
Not all people who use check-cashing services are unbanked. According to FiSCA, 60% of its customers have a bank or credit union account but choose check-cashing services for convenience, flexibility, or other reasons.
#3. People who require quick access to financial services.
Some people reside in areas with no brick-and-mortar bank offices, while others require the convenience of cashing a check after regular banking hours. Many check-cashing establishments are located in underbanked services and are open late. Some are open 24 hours a day, seven days a week.
The Benefits and Drawbacks of Check Cashing Services
There are benefits and drawbacks to using check-cashing services:
Benefits of Check Cashing Services
- Without having to wait for checks to clear, you have immediate access to cash.
- Customer service hours and locations may be more convenient than bank hours and locations.
- Financial services for the unbanked, underbanked, and those who do not wish to open a bank account
Cons of Check Cashing Services
- Fees can be exorbitant.
- Carrying cash might be dangerous.
- Some check cashing services may attempt to sell high-risk, high-interest payday loans.
- There is no insurance coverage for your funds.
What are Some Alternatives to Check Cashing Services?
Check-cashing services provide a service to millions of people. However, operating outside of the banking system may incur additional expenses and expose consumers to additional risks and vulnerabilities. People who are currently living paycheck to paycheck and do not have considerable savings or disposable money may be unable to afford annual fees of hundreds of dollars.
If you have a bank account or are interested in opening one, here are a few alternatives to consider:
#1. Second Chance Checking Accounts
There are solutions if you have had a bad experience with having a bank account in the past, or if you have been rejected from creating a bank account due to a negative background. Some banks provide second chance checking accounts to assist persons in re-entering the financial system.
#2. Check deposit through a mobile device.
As part of their online banking services, many banks and credit unions are including mobile check deposit facilities. If you don’t have time to travel to the bank or if your bank branch isn’t open during convenient hours, there are other options for depositing your salary.
#3. Direct Deposit.
If you open a checking account, you can probably sign up for a direct deposit, which will transfer your wages, tax return checks, or other government checks directly into your bank account without any additional costs or delays. This is a safe and handy method that can deposit funds into your account faster than waiting for a check to clear.
If you do not have a bank account, you may be able to:
- Cash the check at the issuing bank.
- Deposit your check into a prepaid card account at an ATM.
- Cash the check at a store. When opposed to stand-alone check-cashing services, retailers may offer lesser rates to cash checks. Walmart, for example, charges $4 for checks under $1,000 and $8 for checks exceeding $1,000. For a $1,000 check, this equates to a charge of only 0.4 percent.
Not everyone can or wants to open a bank account or use the traditional financial system. Check-cashing services can provide legitimate assistance to the unbanked and underbanked, as well as individuals seeking convenient alternatives to banks or credit unions.
However, be aware of the expenses, hazards, and drawbacks of using check-cashing services. If you can create a bank account, you should deposit your checks in an FDIC-insured bank or an NCUA-insured credit union.
Check Cashing Stores
Check-cashing stores are suppliers of alternative financial services that allow clients to cash checks (including salary, government payments such as a tax refund, and others) without the need for a bank account. These stores can be located in a number of communities and frequently include additional financial services such as computerized bill payments, money orders, and payday loans.
There are certain advantages to cash-checking stores, which we will discuss below, but the major reason these stores exist is to provide a much-needed service to people who do not have access to (or just do not trust) established financial institutions. As a precautionary measure to prevent fraud, many banks refuse to accept checks from non-customers, and those that do frequently charge fees. As a result, check-cashing stores provide a useful service to a specific segment of the population.
How Do Check Cashing Stores Function?
Check-cashing stores, as the name implies, work by cashing checks – no surprises there. Customers bring in a check from an employer, government, or other third party and pay a predetermined charge to receive payments on time. Customers typically have the option of receiving their money in the form of physical cash or a prepaid debit card, depending on the supplier.
Cash checking stores use many types of verification and security measures to assist prevent and decreasing fraud. The specifics of this are not totally known because doing so would facilitate fraudulent behavior, but you should anticipate providing some of your information to the store, such as identity or proof of work.
Because clients are merely changing checks into spendable currency and are not actually purchasing anything from the store, service providers profit from the fees they charge. These fees differ depending on the supplier, but they are often in the form of a flat fee or a percentage of the check itself (more on this in the cons section).
Who Makes Use of Check Cashing Stores?
As previously stated, the unbanked and underbanked are the core customer base for cash-checking stores. The term “unbanked” refers to persons who do not have a checking or savings account and do not interact with traditional financial service providers such as banks. This could be due to a multitude of factors.
In many cases, this is owing to a poor financial history with traditional service providers. If you’ve ever found yourself frequently switching bank accounts and incurring overdraft penalties and negative account balances with different banks, you’ll understand what I’m talking about. After a while, banks will decide not to engage with particular individuals, making opening a standard bank account practically hard. If you’ve had troubles with ChexSystems in the past, you’re likely to have this problem now.
Others simply dislike or distrust traditional banks. As easy as that. If you’ve had a terrible encounter with a bank that resulted in a pile of unexpected or hidden fees being added to your account, you’re probably familiar with this feeling. People grow afraid of these institutions for a variety of reasons, including poor behavior by celebrities.
However, it is not simply unbanked and underbanked who use these services. For some, a check may not deposit immediately, or they may only have access to a portion of the funds while waiting for the check to formally clear. This isn’t a major deal in a non-emergency. But what if you have debts to pay and can’t afford to wait another 48 hours even if you have payment in hand? This is where a cash-checking store comes in. Unlike waiting for a check to clear, these service providers usually allow you to depart the same day with cash in your hands.
The Benefits of Check Cashing Stores
Customers will always be present at check-cashing stores. Here are a few of the reasons why.
#1. No need for a bank account
This is one of the most important advantages. For those who do not have bank accounts, cash-checking stores provide a crucial service. Even if you are working or getting other payments, you will be unable to access funds unless you have an account or use a cash-checking service.
#2. Immediate Access to Funds
Another significant advantage is the near-instant access to funds from a check. Customers can usually enter a cash-checking store with identification and a check in hand and leave with their money on the same visit. Compare that to having to wait days for a check to clear or only having access to a portion of one’s assets with more traditional banking methods.
#3. The ease of use
Cash-checking stores, like other alternative financial service providers, are frequently open after traditional banking hours. In fact, many are open 24 hours a day, seven days a week, making it simple to stop in and cash a check whenever you want rather than going in the middle of the day when you might not even have the opportunity.
#4. A Fee Structure that is Transparent
Though several of these costs are featured in the “bad” section of our list, there is a real reason to prefer the sort of service provided by cash-checking stores. When you walk into a cash-checking store, the providers are quite explicit and upfront about how much their services cost. You won’t be left wondering how much you need to pay, whether it’s a flat cost or a percentage, and you won’t be slammed with surprise expenses buried deep in a stack of legal language and paperwork. For many people, seeing a clear financial transaction is refreshing. What you see is exactly what you get.
The Downside of Check Cashing Stores
However, there are several reasons why people should reconsider using check-cashing stores on a regular basis.
#1. Expensive Fees
Cash-checking stores, while transparent, are much more expensive than traditional solutions. Institutions normally do not charge fees for cashing and depositing checks for customers who are banked. However, if you visit a check-cashing store, expect to pay fees ranging from 1% to 12% of the check’s amount. Furthermore, some stores charge a one-time fee to become a member and use their service. The real fee is determined by the store of choice and varies according to the type of check and the amount of the check, among other factors. These costs can soon build up and eat into your revenue. It’s your money, after all. You deserved it. Why spend more money only to have access to money you’ve already made?
#2. Uninsured Cash, Increased Risk
Cash kept at home, unlike typical bank accounts, is not FDIC guaranteed. While some customers may prefer to pay using a prepaid debit card, the majority still prefer to pay with cash. Customers run the risk of losing their funds if they are hidden in a shoebox, under the mattress, or in a house safe due to natural disasters, theft, or accidents at home.
#3. Inadequate Access to Other Benefits
The FDIC isn’t the only incentive to use more traditional financial services. Money saved on a card or as cash in a safe does not earn interest like it would in a high-yield savings account. Even if not invested, keeping money in a traditional account is not only safer, but it can also create a tiny return while doing nothing.
#4. Increasingly Likely to Keep Consumers Unbanked
Because of their convenience, users are prone to be trapped in a cycle of using these alternative financial services. Aside from the exorbitant costs, there are also disadvantages to not being properly banked. Furthermore, some cash-checking stores provide customers with more nefarious services such as payday loans or other predatory items.
Let’s take a look at several check-cashing stores that provide check cashing services, such as Walmart and Ace.
Check Cashing at Walmart
Walmart is not simply a famous retail shopping destination in the United States; it is also a popular location for individuals in need of specific financial services. Check-cashing is one of those crucial financial services supplied by Walmart Money Center (usually found in Walmart stores).
Walmart allows customers to cash their checks and have money in their hands instantaneously, similar to how you would pay a check at a bank. It enables those who do not have bank accounts (or who prefer not to use them) to cash their checks.
What Kinds of Checks Are Acceptable for Cashing in Walmart?
Because check fraud is an issue, Walmart is highly stringent about the types of checks that are allowed for its check-cashing services.
As a result, only the checks listed below can be cashed:
- Payroll Checks
- Checks for Tax Refunds
- Government Checks
- Checks Issued by Cashiers
- Checks from Insurance Settlement.
- 401(k), Retirement Distribution Checks
- MoneyGram money orders issued at Walmart.
Personal checks, as you can see, are not on the list. Walmart will accept preprinted checks, such as ones that are not handwritten.
Ineligible Checks in Walmart Check Cashing
- Checks that Walmart will not cash include:
- Checks written by hand
- Postdated Checks
- Checks that are dated more than 180 days old
- Personal Checks
- Money orders that are not MoneyGram
- Checks made out to numerous payees
- MoneyGram money orders not issued at Walmart.
Limits on Check Cashing in Walmart
Walmart has a basic check cashing limit of $5,000 per check.
This maximum was temporarily increased to $7,500 from January to April to accommodate larger checks that customers may bring in as a result of their tax refunds.
Methods of Funds Payment in Walmart Check Cashing
There are two options for receiving the cash:
- Cash
- Reloading a Walmart MoneyCard
When you load funds into a Walmart MoneyCard, the standard reloads cost is waived.
If you already utilize a prepaid card account as part of your financial system, the Walmart MoneyCard option is a good alternative.
What are the Check Cashing Fees in Walmart?
Walmart charges a separate check-cashing fee depends on the amount of the check.
The maximum cost for checks of $1,000 or less is $3.00.
The maximum cost for checks worth more than $1,000 but less than $5,000 is $6.00.
The cost is subtracted from the check’s value, therefore you will receive less than the check amount.
What Information must you Provide for Check Cashing in Walmart?
While there is no registration required, you must supply an endorsed check as well as a legitimate form of government-issued ID with your photo (e.g., state ID card, driver’s license, U.S. passport, etc.).
Be ready to supply your Social Security number as well.
Comparing Walmart and other Bank’s Check Cashing Services
When you receive a check, you can cash it at the bank that issued it; there is no need to deposit it into your own account. The paying bank will quickly verify the check and pay the monies to the check receiver. This, however, usually comes at a cost.
Banks may impose a non-customer check-cashing fee, which could be a flat cost or a percentage of the amount cashed. There are fees associated with cashing checks at banks as a non-customer:
Check Cashing Fees for Walmart Non-Customers
| Bank | Non-Customer Check Cashing Fee |
| Bank of America | $8 per check for amounts greater than $50.00 |
| Chase | $8 |
| BB&T | Free under $50; Over $50 a fee of $8 |
| BMO Harris Bank | $10 ($50 is the minimum amount you can cash) |
| Capital One | Free |
| BBVA Compass | $10 |
| Citibank | Free for checks under $5,000 |
| Fifth Third Bank | 1% of the check amount ($4 minimum and $25 maximum) |
| HSBC Bank | Free for personal checks; $3 for business checks under $100 and $5 for business checks of $100 or more |
| KeyBank | 1.0% of the check amount ($3 minimum and $25 maximum) |
| M&T Bank | 2% of the check amount ($3 minimum) |
| PNC Bank | Free for checks $25 and under; 2% of the check amount for checks greater than $25 ($2 minimum) |
| Regions Bank | Free under $10, but above $10, 1% of the check amount ($2 minimum and $20 maximum) |
| Citizens-Bank | $7 |
| SunTrust | Free for checks $50 or under; $7 if greater than $50 |
| TD Bank | $10 |
| Union Bank | $10 fee for personal checks over $100; $10 for business checks over $25 |
| U.S. Bank | $5 |
| Wells Fargo | $7.50 |
Banks, like Walmart, will need identification before disbursing payments. Banks often require two (2) kinds of government-issued identification.
Walmart Check cashing More pricey, but more widely available
Banks typically charge a greater fee to cash a check than Walmart.
However, you may discover that going to a bank branch is more convenient because there are simply more bank facilities in your area than there are Walmart stores.
Cashing of Personal Checks
Another significant distinction is that banks will cash personal checks (again, if issued by that bank).
These are the handwritten checks that Walmart considers too risky to cash.
If you have a personal check and do not have your own bank account, you may have no alternative except to visit the issuing bank to cash the check. As a result, the non-customer check cashing cost is almost certainly unavoidable.
There are No Limits.
Banks, unlike Walmart, have no specified limits on the size of the check they would cash. The bank should not limit the payment if the check funds are verified to be available.
As a result, even if you have a preprinted check, the amount may exceed Walmart’s allowed limitations. Once again, you must use the issuing bank (or a bank account).
Check Cashing at ACE Cash Express: A Step-by-Step Guide
ACE Cash Express is a financial business that provides short- and long-term payday loans without the need for a bank account, allowing customers to obtain their money quickly.
In addition to payday loans, ACE offer checks cashing services for a nominal fee.
They can cash practically any sort of check on the market because of their sophisticated check cashing system.
What Kinds of Checks Does ACE Cash?
Most checks can be cashed at ACE check cashing. These are some examples:
- Personal Checks;
- Payroll checks;
- Refunds of income taxes;
- Checks from the government
- Checks from insurance companies
- Money Orders
What is the fee for cashing a check at Ace Cash Express?
The cost of cashing a check at ACE Cash Express will vary depending on the type of check you have. Cashing a personal check might cost between 2% and 6% on average. For example, they will charge a 2% fee to cash a government check. If the check is computer produced, they will charge a cost of 2 1/2 percent, and if it is a personal check or money order, they will charge a fee of 6 percent. A $1,000 government check, for example, will cost you $30, whereas a $1,000 personal check may cost you $60.
According to this businessyield article, ACE Cash Express charges a fee of 3% of the check amount. This cost may vary from location to location.
A member on Yelp said that they were charged 2% for a payroll check, but they would charge extra for a handwritten check at a store in Orlando, Florida.
Overview of Ace Cash Express Check Cashing
Payroll, personal, checks made payable to a corporation, cashiers checks, income tax refunds, government checks, insurance settlements, and money orders are all acceptable at ACE. They can either load your check into a prepaid debit card or simply give you cash when they cash it. This debit card can be replenished when your next check is cashed, or you can just trash it when you’re done if it’s a one-time transaction.
Before they pay your check, they will use their sophisticated system to ensure that the funds are accessible. They will also request legal picture identification and your signature on the back of the check. According to the website, the approval process is simple, there is no credit check required, and no appointment is required.
What are the Additional Costs for Check Cashing in ACE Express?
If the funds are placed into a debit card, some prepaid fees may apply in addition to the percentage deducted from the check. Some claim that if you use a debit card, a $1 fee is imposed to each purchase.
What you should know:
To cash your check, you must present a photo ID.
While they often cash most checks, they will be unable to function under certain scenarios. To be safe, contact your nearest location to see if they can assist you with your specific check.
ACE Online Check Cashing
ACE has a mobile app exists that allows you to do check-cashing online. It’s called ACE Mobile Loads, and it’s free to download from the App Store and Google Play.
However, because ACE is primarily a payday loan company, they do not cash checks online without the usage of that app. They offer an online loan application, but if you want to use ACE, you must cash your check using the mobile app.
Ace Check Cashing Procedures
Cashing a check at ACE is a simple process that is similar to cashing a check at a bank or credit union. Follow the steps below to make the ACE check cashing process as efficient as possible:
- Sign your name on the back of the check you want to cash. Sign your name on the provided dotted line.
- Bring a valid form of Photo ID.
- Hand over the check.
- Take the money left over after ACE’s fee.
If you don’t already have one, consider opening one. If you cash a check at ACE, you will still receive the majority of your money, but there are better long-term alternatives, such as a bank or a food store.
What is the turnaround time for check cashing?
The turnaround time for check cashing can vary depending on the type of check, the check cashing service, and the financial institution involved. Some check cashing services may offer instant check cashing, while others may take several days.
Are there any limits to the amount of a check that can be cashed?
Yes, there are typically limits to the amount of a check that can be cashed. The limits can vary depending on the check cashing service and the type of check. Some check cashing services may have a maximum limit of $1,000 or more, while others may have a lower limit.
Can checks from out-of-state be cashed?
Yes, checks from out-of-state can be cashed, but the process may be more difficult and take longer. Check cashing services may require additional identification or verification for out-of-state checks, and the financial institution involved may take longer to process the check.
What happens if a check bounces or is returned?
If a check bounces or is returned, the check cashing service may charge a fee, and the customer may be responsible for repaying any funds that were advanced. The customer’s account may also be flagged, which can affect their ability to cash checks in the future.
Can checks be cashed 24/7?
No, not all check cashing services are open 24/7. Some check cashing services may have limited hours or be closed on weekends and holidays. It’s important to check with the specific check cashing service for their hours of operation.
Are there any fees associated with check cashing?
Yes, there are typically fees associated with check cashing. The fees can vary depending on the check cashing service and the type of check. Some check cashing services may charge a flat fee, while others may charge a percentage of the check amount.
Check Cashing FAQs
How can I cash a check immediately?
Taking your check to the check writer’s bank is the safest and quickest option to acquire cash. That is the bank or credit union where the check writer’s funds are held, and you may get the money out of the check writer’s account and into your hands immediately.
How can I cash a check?
Most people deposit checks in their bank accounts, cash them at their bank, or show their ID and cash the check at the bank that issued the check. Cashing a check without a bank account is achievable by cashing it at the issuing bank or a check-cashing store.
Can you cash checks with cash App?
Cashing a Check or Using a Mobile Check The Cash app’s Capture function allows you to cash checks and have them credited to your Cash App Cash account and wallet by using the Cash app on your mobile device. Simply take a photo of the check you want to cash and email it to them for review.
Can I cash a check online without a bank account?
Cashing a check without a bank account is doable, but you may be charged a fee. In other circumstances, you may need to perform some additional legwork to make it happen.
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