Check Cashing Services: Pros, Cons and Alternatives

Check cashing is a service that allows people to cash a check without having a bank account. This service is especially useful for people who are unbanked, meaning they do not have a traditional bank account. Those who are unbanked often turn to check cashing services to access funds quickly and easily. Check cashing services are also used by people who are underbanked, meaning they have a bank account but still use check cashing services to cash their checks. In many cases, people opt to use check cashing services because they need to access cash immediately and do not have time to wait for checks to clear. However, check cashing services often come with high fees that can often be significantly higher than those charged by banks. While check cashing services are convenient, it is important to weigh the benefits against the costs and potential risks before choosing to use these services.

Understanding Check Cashing Fees

Check cashing fees are typically calculated as a percentage of the check amount, which can vary depending on the provider. Some providers charge a flat fee for certain types of checks. Common check types and the associated fees may include:

  • Personal checks: 2-10% of the check amount
  • Payroll checks: 1-5% of the check amount
  • Government-issued checks: 1-3% of the check amount
  • Insurance settlement checks: 2-12% of the check amount

Comparing Fees Across Providers

It is important to compare fees across different check cashing providers before making a decision. Some providers may have lower fees for certain types of checks or may offer discounts for regular customers. Comparison websites such as can be useful for finding providers in your area and comparing fees side by side. Some check cashing providers also offer online and mobile check cashing services that may have lower fees than in-person services. However, it is important to exercise caution when using these services, as they can be a target for fraud and scams.

What percent do they charge to cash a check?

The percentage charged to cash a check varies depending on the location and institution. Generally, check-cashing stores charge a fee of 1-12% of the check value. The fees are higher for larger checks and may also depend on the type of check (personal, payroll, government, etc.). Banks and credit unions may also charge a fee to cash a check, with fees ranging from $0 to $10 or more. It’s important to check with the specific location beforehand to understand their fees and policies.

Benefits of Check Cashing Services

Check cashing services can be a convenient way to access funds quickly, particularly for those without bank accounts. Unlike traditional banking services, check cashing providers typically do not place a hold on funds, meaning you can get access to your money immediately.

According to the FDIC, around 7% of US households are unbanked, meaning they do not have a traditional bank account. Check cashing services are one option for these individuals to access funds and manage their finances.

For some individuals, using a check cashing service can be more private than using a traditional bank account, as there is no paper trail or record of transactions.

Interesting Fact: Rise of Digital Check Cashing

With the rise of digital check cashing services, individuals can now cash checks without having to leave their home. These services allow users to snap a photo of their check using their smartphone and deposit the funds directly to a prepaid debit card or bank account. Some popular digital check cashing services include:

Provider Fees Features
Ingo Money 2% to 5% of the check amount Instant approval and funding
Brink’s Money $5 per check for amounts up to $5,000, $10 for amounts over $5,000 Direct deposit to Brink’s prepaid card or ACH transfer
Comdata 1% to 5% of the check amount Instant card funding and check verification

What are the pros and cons of check-cashing?


  • Instant access to funds – Check-cashing services provide quick access to funds without having to wait for the check to clear.
  • No bank account required – People without a bank account can use check-cashing services to access their funds.
  • Convenience – Check-cashing services are available at various locations, including grocery stores, payday loan shops and check-cashing stores.
  • Privacy – Check-cashing services offer a level of privacy as they do not require personal information like your bank account information.


  • High fees – Check-cashing services charge high fees, typically ranging from 1% to 5% of the check amount or a flat fee.
  • Increased risk of fraud – Since check-cashing services do not verify the authenticity of the check, there is an increased risk of fraud for both the customer and the service provider.
  • Limited to certain types of checks – Check-cashing services typically only cash payroll, government, and other types of checks. They may reject personal checks or checks from unknown sources.
  • No protection against loss or theft – If the check is lost or stolen, there is no recourse for the customer to recover the funds.

Overall, check-cashing services can provide quick and convenient access to funds, especially for those without a bank account. However, the high fees and increased risk of fraud make it a less favorable option compared to traditional banking services.

Risks of Check Cashing Services

Check cashing services can be a target for scam artists who try to cash fraudulent checks or steal personal information. Fraudulent checks can be difficult to detect, and check cashing providers may not be able to verify the authenticity of every check.

High Fees

Check cashing fees can be very high, particularly for larger checks. For example, fees for cashing a $1,000 check could range from $10 to $50 or more. These fees can add up quickly and reduce the overall amount of money received from the check.

No Protection for Lost or Stolen Checks

Unlike with a bank account, there is no protection for lost or stolen checks when using a check cashing service. If a check is lost or stolen, the individual may not be able to recover the funds.

Interesting Fact: Growth of Check Cashing Chains

Check cashing services have become big business in recent years, with major check cashing chains operating in many states across the US. Some of the largest check cashing chains include:

  • ACE Cash Express
  • Advance America
  • Moneytree
  • Check Into Cash

These chains offer a variety of financial services in addition to check cashing, such as payday loans, money transfers, and prepaid debit cards.

What is a disadvantage of using a check cashing service?

  • High fees: Check cashing services charge high fees that can be as much as 3-5% of the check amount. This means that if you have a $1,000 check, you may have to pay $50 just to cash it. This can be an expensive option if you’re cashing multiple checks or if you’re living paycheck to paycheck.

Opening a Bank Account

One of the most obvious alternatives to using a check cashing service is to open a bank account. While not everyone may be able to qualify for a traditional bank account, there are often options available for those with poor credit or banking history. Some benefits of opening a bank account include:

  • Avoiding check cashing fees
  • Access to other financial services, such as savings accounts and credit cards
  • Protection for lost or stolen checks

Mobile Banking Apps

Many banks now offer mobile banking apps that allow individuals to deposit checks using their smartphone camera. This can be a convenient alternative to check cashing services, as it removes the need to physically visit a bank or check cashing provider. Some benefits of using mobile banking apps include:

  • Avoiding check cashing fees
  • Convenience and flexibility
  • Protection for lost or stolen checks

Prepaid Debit Cards

Prepaid debit cards can also be a good alternative to check cashing services, particularly for those who do not want to open a bank account. Some benefits of using prepaid debit cards include:

  • Avoiding check cashing fees
  • Ability to make purchases and withdraw cash from ATMs
  • Protection for lost or stolen cards

It is important to note, however, that prepaid debit cards may come with their own fees, such as monthly maintenance fees or ATM withdrawal fees.

What is a safe alternative to cash and personal check?

There are several safe alternatives to cash and personal check. Some of the options include:

  • Debit cards – linked to a bank account, debit cards offer a safe and convenient way to make purchases without carrying cash.
  • Credit cards – when used responsibly, credit cards offer protection against fraud and unauthorized transactions.
  • Online payment services – such as PayPal, Venmo, or Cash App, provide a safe and secure way to transfer funds online.
  • Mobile payments – many banks and financial institutions offer mobile payment options that allow you to make transactions using your smartphone.

It’s important to choose a payment method that you feel comfortable with and that offers the security and protection that you need. Always make sure to keep your personal and financial information secure and never share it with anyone you don’t trust.

How to Choose a Check Cashing Provider

When choosing a check cashing provider, location should be a key consideration. Some things to keep in mind include:

  • Choose a provider that is located conveniently to your work or home
  • Consider the provider’s hours of operation
  • Look for providers that have multiple locations, in case you need to cash a check when you’re out of town

Of course, another important factor in choosing a check cashing provider is the fees they charge. When comparing different providers, look for:

  • Providers that charge lower fees for the types of checks you most commonly need to cash
  • Providers that are up-front about their fees and don’t hide charges in fine print
  • Providers that offer loyalty programs or other incentives that can help you save money over time

The reputation of a check cashing provider is another key consideration. When researching different providers, be sure to:

  • Look for online reviews from past customers
  • Ask friends or family members for recommendations
  • Check with the Better Business Bureau to see if any complaints have been lodged against the provider

By taking the time to evaluate different check cashing providers based on these factors, you can help ensure that you’re getting a fair deal and protecting your personal finances.

What is the best option for cashing a check?

There are several ways to cash a check, each with its pros and cons. Here are the most common options:

  • Cashing the check at the bank it was issued from
  • Cashing the check at your own bank
  • Depositing the check via a mobile app
  • Cashing the check at a retail store or check-cashing service

The best option depends on your preferences and circumstances. If you have a bank account, depositing the check via a mobile app or cashing it at your bank may be the most convenient and cheapest options. If you need cash immediately, a retail store or check-cashing service may be more suitable, but expect to pay substantial fees. Some websites and apps, such as Ingo Money and Check Into Cash, offer online check cashing services that deposit funds into your bank account or debit card for a fee.


Check cashing services can provide a quick and convenient way to access funds without a traditional bank account. However, it is important to carefully consider the fees, risks, and alternative options before choosing a check cashing provider. By understanding how check cashing works, the benefits and risks involved, and the factors to consider when choosing a provider, you can make informed decisions about how to best access and manage your money.

Ultimately, while check cashing can be a valuable service for those who need it, it is important to remember that the best way to manage your finances over the long-term is by building a relationship with a bank or credit union. If you are currently relying on check cashing services and are interested in opening a bank account, many banks and credit unions offer specialized products and services to help those who may have had difficulty qualifying for traditional banking services in the past. With the right information and resources, you can take control of your finances and make the most of the services available to you.

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