Believe it or not, close to 8.4 million American households don’t have a bank account. This can be especially inconvenient if you need to cash a check. Most people cash checks at their own banks. Without this service, where does one turn?
This article will take a look at your options for the best places near you to cash a personal check without a bank account.
Why Don’t People Have Bank Accounts?
Before we look at the best places to cash a personal check without a bank account, let’s take a look at reasons why people don’t have bank accounts in the first place.
They Don’t Provide the Right Services: Many banks require customers to have a minimum balance before opening bank accounts. Others charge fees that make bank accounts unaffordable. This makes it difficult for low income people to open a bank account.
People Don’t Have Enough Time: People who work long hours may not have time to visit banks when they are open. If this is the case, they may prefer to work with a check cashing option that is open extended hours.
People Don’t Trust Banks: The distrust of banks may be rooted in the Great Depression when many banks failed and closed causing people to lose the money they had invested there. Although there are now laws that prevent these kinds of losses, many people still believe there is a chance they will face similar circumstances in the future.
Banks have also built up a lack of trust because they are focused on making money. Some banks advertise more expensive services to their customers while drawing less attention to lower cost options. It is easy to see why this can make people distrustful.
Financial Literacy: It’s sad but true, many people in America are financially illiterate. Therefore, they do not understand how banks work. It is for this reason that many choose not to work with banks at all.
What Does it Mean to Be Underbanked?
While some people turn to alternate sources for cashing checks because they don’t have bank accounts, other are underbanked.
Those that are underbanked have a bank account but will often rely on other financial services such as money orders, payday loans and check cashing services as an alternative to the traditional loans they get through a bank. This may be because they don’t have access to convenient, affordable banking, or it may be because they prefer these alternatives.
Places to Cash a Check without a Checking Account
Now that we know the reasons why people might want to look at alternatives to banks when it comes to check cashing, let’s take a look at some of the places you can go to cash a check without a checking account.
The Bank That Issued the Check
One of the easiest ways to cash a check is to go through the bank listed on the check. This information should appear on the upper right hand corner of the check or it may be directly below the memo line.
You can simply go into the branch to cash the check, but you may want to call in advance to make sure you won’t encounter a problem. While on the phone, find out their check cashing policy. You should also verify that the person who wrote they check has enough funds in their account to cover the check.
Some bank accounts will want to call the account owner to verify that they have their permission to cash the check. They may even call them while you are on the phone.
Some banks charge a fee to individuals who cash checks without a bank account while others do not. However, even those that charge a fee tend to be inexpensive. Fees can be flat rate or a percentage of the amount of the check.
Banks will also require 1-2 forms of government issued ID like a passport or driver’s license.
Most banks will only cash checks written by account holders while others will cash checks whether they are written by account holders or not. Here is a list of banks that will cash your checks as well as the fees they charge.
- Bank of America: $6 fee for noncustomers
- BBVA Compass: $8 fee for noncustomers
- BMO Harris Bank: $10 fee for noncustomers, checks must be $50 or more and must be written by an account holder).
- Chase Bank: $8 fee for noncustomers
- FifthThird Bank: 1% of the check value fee for noncustomers
- SunTrust Bank: Free for checks under $50, $7 for checks over $50
- US Bank: $7 fee for non customers
- Wells Fargo: $7.50 fee for non customers
Walmart is a great place to pick up necessary items, and you can also get your checks cashed there. With Walmart locations in most neighborhoods, this drug store is a convenient option for when you need funds.
Another bonus, Walmart charges reasonable fees for check cashing asking for $4 for checks that are $1000 an under and $8 for all check above $1000. However, they have stricter policies on personal checks. They will only cash personal checks up to $200 and they charge a $6 fee for this service.
They will also only cash checks under $5000 although this limit is raised to $7500 during tax season (Jan to April).
You will also need to provide valid ID.
Kmart stores are becoming more difficult to find due to the fact that they are struggling financially. However, the branches that remain open offer check cashing services for personal and payroll checks.
They are also known for charging low check cashing fees. A $500 personal check will cost just $1 to cash. They will also cash government issued and payroll checks up to $2000 for the same amount.
Note, before heading into a Kmart location, it’s a good idea to call in advance to make sure the store is still open.
Gas stations used to be a great option for check cashing. In more recent times, many have stopped cashing checks due to increasing cases of fraud. When fraud occurs, gas stations have almost no way of tracking down the culprit.
However, 7-11’s are gas station locations that still cash checks. In fact, many of them have Vcom kiosks in their store. This is a touch screen station that operates much like and ATM. It will allow you to cash, checks, pay bills and handle finances.
Even more convenient is the Transact by 7-Eleven app. This app allows you to deposit checks through your phone. The cash then gets added to a 7-Eleven prepaid card with works just like a debit MasterCard. The cards are accepted at most retail locations.
It may take up to 48 hours for the funds to appear on the card.
Other gas stations that offer check cashing options include:
- Pilot Flying J
- Travel Centers of America
In some instances, your employer may be able to cash your check for you. However, there may be some rules and regulations involved that make this service inconvenient.
Employers can cash payroll checks of any amount. They also may be able to cash other types of checks as long as they are under $1100.
Another option; ask your employer to pay you in cash.
Not every grocery store offers check cashing options but here are some that do:
- Stop & Shop
- Winn Dixie
Grocery stores are a convenient check cashing option as it’s likely you are already there a couple of times a week. Most of them will not cash personal checks but government checks, payroll checks, cashier’s checks and money orders are all perfectly acceptable.
Fees and check limits will vary from store to store and most will require a government ID.
Endorse Your Check to a Friend or Family Member
If you have a friend or family member you can trust, you can endorse the check to them. Then have them cash the check for you and give you the cash.
To endorse the check to them, you will have to
- Write pay to the order of (name) on the back of the check
- Sign underneath
You will also need to be present at the bank with the person that is cashing the check.
While this might not be the most convenient option, as long as your friend or relative doesn’t charge you, it will be totally free.
Load Funds onto a Prepaid Debit Card
Prepaid debit cards are another option for cashing checks. You can set up direct deposit so that checks are automatically loaded on to the card.
Some cards may have an app that allows you to snap a picture of the check and load it on the card that way. In other instances, you will have to use an ATM.
Once money is loaded onto the card, you can use it just like a debit card to pay for goods at retail locations.
However, a prepaid debit card does have one major drawback and that’s fees.
Prepaid debit cards charge a fee to withdraw money at an ATM or at a bank window (around $2.50 plus bank charges). They also charge 50 cents every time you check you balance and a $5.94 monthly fee unless you add $1000 to the card monthly.
Some cards even charge reload fees that can be as high as $5.95.
Check Cashing Outlets
Check cashing outlets are an obvious choice when it comes to cashing checks, but they can also be the most expensive. Some of them require customers to become members before they will cash your checks. You will have to pay a membership fee and you may have to pay a first time use fee as well.
On top of that, you may also have to pay 1% to 12% for every check you cash. So, for a $1000 check, you’re looking at $10 to $120. Some check cashing outlets charge an additional flat fee on top of that percentage.
In addition to charging exorbitant fees, check cashing places are known for not being the most trustworthy of businesses. One popular scam they engage in involves calling customers to offer them a loan and to request payments to secure the loan. Unfortunately, the loan is never received, and the customer is never reimbursed for the down payment.
Although, many check cashing outlets engage in dishonorable activities, but there are some honest ones out there. Here is a list of outlets you can trust.
- Check into Cash: These locations have been open since 1993 and there are several around the country. They charge just $2 a check after the initial check cashing fee is paid.
- PL$ Check Cashing: PL$ has bene open since 1997 and they have several locations around the country. They have a 1% plus $1 fee for each check cashed. Therefore, a $500 check will cost you $6 to cash.
- Speedy Cash: Speedy Cash has over 200 location in 12 states. They advertise their fees as ‘as low as $2’. However, with this wording, it is likely to mean $2 plus a percentage. It’s a good idea to do some advance research to know exactly how much you will be paying.
Other Options for Opening a Checking Account
It’s good to know that there are check cashing alternatives for those who don’t have a bank account, but the truth is, many of them are costly and/or inconvenient. That’s why opening a bank account may be the best option.
The good news is, there are banks that offer accounts for those who are low income and/or have bad credit.
Fifth Third Bank, for instance, offers an Express Banking account option. Customers who sign up are not subject to a credit check and there are no minimum balances or monthly fees required.
If you average 16 transactions a month, depositing checks and making withdrawals will be free. Those with fewer transactions will be charged a 4% fee for depositing or cashing personal checks and 2% for government checks.
Another option is to simply save money until you have the funds to open a bank account that doesn’t charge fees. There are many things you can do to increase your income including the following:
Create a Budget: Creating a budget is a good first step when it comes to saving money. That way you can see exactly how much you are spending and how much money you can afford to put away.
Cut Back on Expenses: If you are eating lunch out each day during work hours, try bringing lunch from home instead. Forgo on that daily Starbucks coffee and hold off on that vacation until next year.
Get a Side Gig: It is fortunate that the internet has given us so many options when it comes to making extra money. Consider freelancing or selling items around your house on Ebay. If you are crafty, consider selling homemade items on Etsy. If you have extra space in your home or own a second property, try renting it out on Air BnB. There are also sites that allow you to rent out your car, van or closet space. If you are handy, you can list your services on the internet as well.
Look Into Cutting Back on Your Bills: Cell phone and cable companies offer new specials and discounts on an ongoing basis. Call them to find out whether any of their current offers will help you save on your monthly bill.
If you don’t have a bank account, there are several options for cashing your checks. However, it is advisable to research carefully to ensure you are not giving away too much of your money for these services. Good luck finding a solution for your financial needs.