I came across an article on NPR recently about check cashing companies as an alternative to banks.
As a personal finance writer, I have always considered check cashing companies to be predatory. They provide a service to people, but charge exorbitant rates, and are generally found in low income areas where people are more likely to be living paycheck to paycheck, and the few days it takes a bank to clear your cash might mean no food on the table. It seemed to me that they were taking advantage of people.
This article however, flipped that argument on its’ head by highlighting the fact that many of the 60 million Americans that use check cashing services* do so to avoid bank fees, overdraft fees, and figuring out when a check would hit their account. While there are fees involved in cashing a check the people interviewed by NPR said that they felt like they knew what they were getting versus banks who often charge fees or arrange payments so that customers are hit with fees-a large portion of their revenue.
Now I believe that many of those customers are choosing to avoid banks, which they distrust, and using check cashing as an alternative financial system. When you consider how long you may have to wait for a check to be available in your bank account, it does make sense.
photo credit: TheTruthAbout…
Personally I have never used a check cashing service, and while I have had issues with a bank fees, I largely avoid them now thanks to smart money management. I do have a deep dislike for larger banks, because I feel they offer poor customer service, and in some ways act more predatory than a loan shark!
I prefer to bank with smaller, more customer oriented credit unions, and USAA who have stellar customer service. Have you used a check cashing service? If not, why not? If you have, why did you?
Kelly
Disclosure: * represents a sponsored link. I also have an ad with this company in my sidebar.
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