| 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.
What You Should Know
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. 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.
The bottom line:
Think about the costs before using
a check cashing store.
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.
For More Information
Consumer Federation of America
The Consumer Federation of America
surveyed 111 check cashing outlets in 23 of the largest urban areas in
1997 for information on the cost to cash payroll, government, and personal
checks. Survey findings are available on CFA's Web site. (Adobe Acrobat
required.)
URL: www.consumerfed.org/ckcasherspr.pdf
Electronic Transfer Account Locator
Service
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: www.eta-find.gov |
