Before You Enter a Check Cashing Store
Some people rely on check cashing stores to cash their payroll, government, or personal checks. These corner stores charge customers very high fees for their check cashing needs. If you use check cashing stores, you should be aware that there are less expensive ways to cash that check.
You can avoid paying high fees by opening or using a basic checking or savings account at a bank, savings and loan, or credit union. Think about the costs before using a check cashing store.
The monthly fees for a basic checking account are usually less than the fee a check cashing store charges to cash just one check. Even if you don't have an account, most banks, savings and loans, and credit unions will cash government and payroll checks for less than the check cashing store charges.
If you receive a federal benefit, wage, salary, or retirement benefit, you can open an Electronic Transfer Account (ETA). Designed by the U.S. Treasury, an ETA is a new type of bank account that lets you receive your federal government payments electronically through direct deposit, for a cost of $3.00 or less. You can make a minimum of four cash withdrawals and four balance inquiries per month. Check with your local bank to see if it offers this service and to learn what the specific requirements are to open an ETA account.
When you use a check cashing store, ask for the fee in dollar amounts. Many check cashing stores post their fees in percentages, leaving customers unsure of what it really costs to cash the check. Make sure they tell you the fee in dollar amounts so you clearly understand the costs.
Insist on an itemized receipt. Many check cashing stores charge different fees depending on the time of day and the employee who cashes your check. Ask for an itemized receipt that lists the amount of the check, the fee, and the amount of cash received. Then compare the amounts with the fees you were told or that were posted at the store.
Additional Resources
Electronic Transfer Account Locator Service
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The U.S. Department of Treasury maintains a Web site that
explains ETA accounts - in English and Spanish - and provides a
locator service to find the nearest ETA place offering this
service.
URL: http://www.eta-find.gov
