This Is Why Check Cashing Stores Are Growing in Popularity

Consumers are increasingly choosing to abandon their checking accounts and opting to use check cashing services instead. Recent studies show that 17 million people, or 8 percent of US households, are unbanked, meaning that they do not use a bank at all. In addition, about 43 million people have a bank account, yet they still continue to supplement them with alternative financial service providers.

While the popularity of checking cashing stores continue to grow, there are some people who are unaware of all of the benefits that they have to offer. In the following, we will discuss some of the main advantages of using check cashing establishments and why many consumers favor them over banks.
 

One of the primary reasons why many people prefer check cashing establishments is that banks impose a variety of hidden fees. Due to their various fees, banks can prove costly for consumers in the long run. When you consider account maintenance fees, ATM fees, and overdraft fees, the choice is clear. Check cashing stores are more transparent about their fees and usually post them prominently in their stores. In addition, when you visit a check cashing establishment, you can cash your check and obtain funds on the same day. In addition, there are no hold times, and the check cashing fee is deducted upfront.

According to a study undertaken by researcher and Ivy League professor Lisa Servon, the fees that banks charge for bounced checks, late payments, and overdrawn accounts can add up over time. While consumers who rarely overdraw their accounts and maintain a high minimum balance may be able to avoid costly maintenance fees, those who are unable to do so may find that using a bank ends up costing them more money in the long run.
 

Another benefit of using a check cashing store is that it allows you to cash both business and personal checks with little or no hassle, which can prove much different from visiting a local bank branch. Typically, if you are not a regular customer with a particular bank and would like to cash a check, you will be charged a fee. Moreover, in some cases, a bank may require you to open an account before it will honor your check. If the bank subsequently does cash your check, there will be a holding period, which can create an inconvenience for consumers who plan to use their funds to pay bills or small business owners who need to take care of urgent obligations.

However, most check cashing stores will cash your check immediately. If an additional fee applies, you will be notified right away and won’t need to worry about whether you have an account there. Moreover, Servon’s study found that another primary benefit of check cashing stores is that many consumers believe that they provide better customer service than banks.
 

A check cashing store is essentially a one-stop shop. In addition to cashing checks, consumers can undertake a variety of other transactions. Check cashing establishments allow customers to purchase and reload prepaid debit cards, make wire transfers, pay bills, and obtain money orders.

Another reason why people often prefer check cashing stores is because of bank overdraft fees. If you spend more money than you have available in your checking account, a bank will charge an overdraft fee each time your account drops below zero. Even if you have chosen to have your bank account set up so that no transactions are honored if the necessary funds are not available, many banks will still charge a nonsufficient funds fee.
 

The choice of whether to handle some or all of your financial transactions at a check cashing store or bank is a personal decision, and it is important to conduct research and carefully consider the pros and cons. There are a number of good reasons why you should choose a check cashing establishment over a traditional bank, and most of them relate to greater convenience and transparency. Check cashing businesses have more locations than bank branches—particularly in communities that are underserved—and they tend to stay open later than banks. If you are looking for less hassle and more convenience, then a check cashing store may be the ideal solution to suit all of your needs.