WHAT DO WE MEAN BY CHEQUE CASHING SERVICES?
Cheque cashing is exactly what it sounds like: people bring in their cheques that they want to be cashed immediately and walk out within five minutes with their money. Cheque cashing services offer a more limited amount of services compared to normal banks. They offer you services like check cashing along with money orders, electronic bill payments, ATM access services, and payday loans.
WHAT KIND OF CHEQUES THEY ACCEPT?
They accept almost every type of cheque like – Payroll cheques, government cheques, small business cheques, personal cheques, post-dated cheques, U.S. Dollar cheques, insurance cheques, etc are all able to be cashed. But be aware that there are some places that do not accept personal cheques to protect themselves from losing money if the cheque bounces or is fraudulent.
DOES CHEQUE CASHING SERVICES CHARGE ANY ADDITIONAL FEES?
Yes, they charge some amount, Most businesses settle on a rate that combines an item fee flat rate with an additional fee based on a certain percentage of the cheque cashed. Percentage fees tend to range between 2% and 4.9% depending on where you go Keep in mind that some companies that offer cheque cashing services at a higher rate may not have additional fees whereas those with lower interest rates often have a fee that is the same or higher than the percentage fees.
WHY DO PEOPLE USE CHEQUE CASHING SERVICES?
There are many reasons why people prefer cheque cashing services. In some cases, the person who needs the cheque cashed may not have a bank account or credit union (or if they do, might owe money at their bank and are afraid that the funds of the cheque will be seized as they try to deposit it).
Sometimes cheques are too large to be cashed in banks, or sometimes the customer needs the funds immediately and does not have time to wait for the cheque to be cleared. Another common scenario is when people need to have a cheque cashed at a time when the bank is closed (or the cash counter is closed leaving them with no option but to deposit it in an ATM where they will be forced to wait until the hold period is fully up).
IS CHEQUE CASHING SERVICE IS COST EFFICIENT?
While cheque cashing may seem convenient and tension-free, it also costs you a lot of money in the long game. Let’s say you have to cash a cheque for $1000 every month for a year. That equals $10000 dollars over a year. If you cash your cheque at a bank, you will get the full amount.
If you go to a cheque cashing service they charge you an item fee of $2 per cheque (which, with one cheque a month, comes to $24 over a ) and a percentage rate of 3% then you end up losing $311.28 a year! Now suppose you have to cash a cheque twice a week. It adds up.
If you can, it’s always a better choice to cash your cheque directly at a bank counter. If you’re concerned about the hold period, try going directly to the center rather than depositing your cheque in the bank ATM. Tellers can often reduce or even completely eliminate your hold time (depends upon the type of check).
If you’re cashing employees or payroll cheques, see if your boss can put you on a direct deposit system so your money shows up directly in your account. Direct deposit is another option given by government cheques to make accessing your funds easily and more efficiently.
If you owe money to your bank and you are worried they’ll seize your money the moment you try or deposit it, try opening a new account with different banks. Depending on the size of the cheque, you might be willing to go ahead and try depositing it with the bank you owe money to anyhow
IS THERE ANY DIFFERENCE IN PAYDAY LOAN AND CHEQUE CASHING SERVICE
With payday loans, you’re being advanced money that you don’t actually have but will receive imminently within two weeks. A payday loan is just like a regular loan, meaning you can default on it and accrue interest just like you would do with any other type of loan.
When you have your cheque cashed, your work is done as soon as you walk out the door and they’ve taken their percentage off. There is no interest that has to be paid back afterwords
MAIN REASONS WHY YOU SHOULD USE A CHEQUE CASHING SERVICE.
1- Cost Check cashing services tend to charge very clear fees for his or her services and other people’s fees often seem really high compared to traditional banking services. fairly often, that’s where the comparison stops – check cashing services appear to be a ripoff. they only appear the hay during a more subtle way, through other fees. Banks charge several types of fees. Many of the non-check cashing services that they supply also undercut banks, just like the value of a money order or a prepaid revolving credit. you furthermore may don’t typically have to await the services there, while on the other hand, you’ll sometimes have to wait several days for a check to deposit.
2-Transparency Check cashing services are very upfront about their fees – as i discussed earlier, they’re often displayed on an enormous board inside the shop so you’ll see what everything costs right off the bat, a bit like at a quick food restaurant.
With a bank, you regularly don’t see the fees. They’re included in the small text during a brochure or within the fine print of a lengthy handout. That means that such fees often surprise customers, and surprise customers aren’t usually happy ones. Seeing your account dinged with a $5 ATM fee and a $9.99 maintenance fee for not having an assigned balance or just to have the account open can be frustrating, especially when you’re not expecting it.
PROS AND CONS OF CHEQUE CASHING.
Pro: Cheque is convenient for both customers and merchants, payers, and payees.
Con: For merchants or individuals several days may pass before you’re alerted that a check was fraudulent or rejected thanks to insufficient funds. If a cheque is returned, you will be assessed a returned check fee.
Pro: you’ll write a check, but your money stays in your account until the payee presents the check to the bank. this provides you time to prevent the payment if there’s been an error.
Con: If the merchant deposits your cheque electronically with the mobile device, your cheque’s amount is going to be deducted from your account nearly as quickly as if you’d used an open-end credit.
Pro: Carrying a check is way less bulky and heavy than carrying cash, especially when distances are involved. Checks also are more convenient thanks to making large payments.
Con: Many merchants and individuals are reluctant to simply accept out-of-state checks or those written on unfamiliar banks.
Pro: you’ll postdate a check, in effect scheduling the payment for a future date. This is often very practical if you favor buying goods or services immediately but only want the cash to be deducted at a particular time.
Con: you’ll need to give your bank notice that you simply have issued a post-dated check, and supply them with details about the payment. If you are not doing so, the payee may deposit the check before the date and if you do not have enough money in your account at the time, you’ll be charged penalty fees and this might also negatively affect your credit score.
Conclusion:
If you have a personal or business cheque, try going to the financial institution where the cheque is drawn with proper identity. They can check if the account the person or business holds with them has sufficient funds and give you the money instantly (sometimes for small fees ).
