2 Ways to Avoid the Check Casher

Adam Rust

Most check cashing is done by people who do not have a bank account. Many individuals do not have enough money to maintain average daily balance requirements. Banks like to charge fees when people don't keep a large enough balance in their account. The big banks usually expect a person to keep $1,500 in their account. Otherwise, they slap on a charge of $10 to $12 every month. Get hit with an overdraft fee and that bank account will cost you another $35.

Those costs are why approximately 7% of people in the US don't have a checking or a savings account. About 18% have one type of account, but not the other. Instead, they use cash. When they receive a check, they go to a check casher. Seven percent of the United States adds up to a lot of folks and they are cashing a lot of checks.

But it doesn't have to be this way. Prepaid debit cards will serve their needs without overdraft or minimum average daily balance fees. That's right: you can't get an overdraft fee, and you won't have to pay for check cashing.  

Some people think they can't qualify for an account. That might be true with a regular bank. That is not true with a prepaid debit card. Everyone qualifies for a prepaid debit card.

It costs about 1-4% of the face value of a check to use a check casher. That is not an insignificant amount. That can add up to hundreds of dollars each year.

If you don't have an account, then you can't use your check without going to the check casher. Why give up part of your pay to the check casher?

Once you have an account, there are 2 ways to avoid the check casher:

1) Go to your employer and set up direct deposit. You will save money and you should have access to your pay much sooner.

2) If your employer insists on paying you with a check, then use the app that comes with your prepaid debit card. This might sound complicated, but really, it is very easy to do. You sign the back of the check, just as you would with a regular deposit. You take a picture of the front and the back of the check. You type in the amount of the check. You submit the check for processing. The bank will send you an email or a text to confirm that they got the check. Then, once the money can be spent, they will send you another message. You get to keep the check for your records.

That's it! Save money. Get a prepaid debit card. Do it today, friend.

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