Check cashing establishments are viewed by the uninitiated as a service used mainly by the unbanked or consumers who are socioeconomically disadvantaged. However, more and more people are discovering that check cashing stores offer a wide variety of products and services that are useful for individuals of all income levels and backgrounds.
Although they can be useful for consumers who are still working on mastering money management strategies or are living paycheck-to-paycheck, check cashing establishments have quickly cemented themselves as prominent financial institutions. Check cashing has become a multibillion-dollar industry and is beneficial for both business owners as well as individual consumers. Here, we'll explore three of the major reasons why using a check cashing establishment makes financial sense for many.
1. More Affordable than Banks
While some people believe that going to the bank is the best way to cash a check, many consumers who frequent check cashing establishments would beg to differ. The fees at check cashing stores can often be significantly less than at a bank. This is particularly the case if a customer has experienced financial difficulties and their account is overdrawn as a result.
Additionally, many banks won’t cash a check from a different financial institution or may place all or part of the funds on hold. Consumers are then forced to wait for varying amounts of time to obtain access to their money. This can be inconvenient in an emergency. On the other hand, at check cashing stores, customers typically get their cash the same day, giving them the opportunity to pay bills and complete any other financial transactions they may have.
Another major benefit of choosing a check cashing establishment over a traditional brick-and-mortar bank is operating hours. Check cashing locations are typically open on nights and weekends, which is extremely convenient for customers who may only be available outside of traditional business hours.
2. Better Customer Service
Banks advertise that they’re customer-friendly and don't judge account holders based on their account balances. However, this isn’t necessarily the case. Many consumers find that they’re treated much more fairly at check cashing establishments than they are at local banks.
Citing everything from better customer service to upfront discussion about fees and charges, many customers argue that check cashing stores provide a more welcoming environment in which to conduct financial transactions. This may be because banking at traditional institutions has become somewhat impersonal in recent years, partially due to technology that requires fewer human employees and fewer trips to the bank by customers.
Additionally, check cashing establishments are usually located in areas convenient to their customers. They are generally easy to access by those who live nearby or who drive past during their commutes.
As one University of Pennsylvania Professor noted in her research, check cashing establishments present a friendly face for customers when compared to the highly judgmental environment of banks. Services offered at customer at check cashing establishments are clearly posted. Not only that, but employees take the time to thoroughly explain procedures, fees, and any other information that the customer may be concerned about. The goal is to make sure the customer completely understands the terms and conditions for whatever services they may be using.
Research has shown that customers choose check cashing places for three main reasons: affordability, level of service, and transparency. More in-depth research indicated that about 7 percent of US adults are unbanked. However, these individuals are not necessarily financially challenged.
This research is contrary to information put out by the Federal Deposit Insurance Corporation (FDIC), which reported that underbanked and unbanked consumers typically make poor financial choices. In fact, choosing a check cashing store over a bank can save consumers a great deal of money in the long run.
3. Variety of Services Offered
Although many employed individuals receive their paychecks via direct deposit to a bank account, others choose to receive their salaries via paper check or direct deposit to a prepaid debit card. Additionally, millions of taxpayers have decided to have their entire tax refund deposited onto prepaid debit cards in recent years.
These cards can often be purchased at check cashing stores. This not only serves to protect the safety of one's sensitive personal information, but some card advertisers even advertised that card holders could access their funds days earlier than those submitted via direct deposit to a bank account.
In addition to check cashing services, these stores also offer services such as money orders, prepaid debit cards, and wire transfers, to name a few. The fees for these services are often significantly lower than similar services offered by banks.
Though banking is not accessible to all individuals, it should be noted that check cashing is not only for the unbanked. Check cashing stores offer a convenient and easy way to gain access to cash that is rightfully yours. For this reason, they will continue to be a go-to option for many of America's consumers.
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