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There are different possibilities if what you do not have is a bank account in the United States. From changing it at the issuing bank to asking someone to collect it for you, you can choose the one with which you feel most comfortable and can pay.
Those Americans who have a bank account shouldn’t have much of a problem cashing a check. But for the millions of people who don’t have an account, cashing a check isn’t that easy.
According to a 2017 survey by the Federal Deposit Insurance Corporation, approximately 8.4 million American households, comprising about 14.1 million adults, do not have a bank account. This article is for them, however, they must take into account that cashing a check without this prior service will generate a fee, in addition to a considerable time spent to verify their identity.
So that you are clear about how to cash a check without having a bank account, we explain how to do it.
Cash the check at the issuing bank
Be careful, it is important that you go to the bank of the owner who issued the check so that you can cash it, since in another institution or credit union they are not obliged to pay a check that is not theirs and for people who are not even their clients.
You need to bring identification like a driver’s license or military ID so you can cash the check. The issuer’s bank must ensure that you are the beneficiary as well as that there are funds in the holder’s account to pay you.
You should also be prepared to pay a fee of around $8 per check. If it’s a regular job, then check that not having a bank account would be costing you approximately $416 dollars a year if you get paid by the week.
Get paid at a retail store
There are large companies in this area such as Kmart, Walmart, among other supermarket chains that offer check cashing services.
According to Bankrate, the least expensive option is Kmart, if you can find one that hasn’t closed. This financially troubled company charges $1 or less for check cashing, including two-part personal checks up to $500. However, to get this service you must join the “Buy Your Way” program. Registering for the program is free.
For its part, Walmart charges $4 for cashing checks up to $1,000 and up to $8 for checks over that amount.
Pay the check on a prepaid debit card
Some people who don’t have a bank account use prepaid cards to deposit their checks and access cash. These types of cards are similar to checking accounts. Your spending is only based on the amount of money you have inside.
These prepaid cards have different options to pay the checks :
- Some prepaid cards allow you to set up direct deposit so that checks are automatically loaded onto the card.
- Other cards come with an app that lets you take a photo of your check to load onto your card.
- You can also deposit your check at an ATM to credit your card.
The biggest problem with this type of card is the fees they carry. For example, the Green Dot Prepaid Visa Card can charge up to $5.95 to add money and charges a $3 ATM fee.
Get paid at a check cashing store
According to Bankrate, check cashing outlets are probably the most expensive places to cash checks. Some of these options require customers to become “members” or purchase check cashing ID cards prior to cashing, in addition to the respective membership and first-time use fees.
Fees to cash a check can range from 1% to 12% of the face value of the check. That means you could pay anywhere from $10 to $120 to cash a $1,000 check. Some companies charge a flat fee in addition to the percentage.
The average face value of a check presented at a check cashing location is $442.30, while the average fee to cash that check is $13.77 or about 3.1%, according to the FDIC. If that amount is a salary you earn each week, then you would pay $55.08 per month or $661 per year in check cashing fees.
Have your check cashed by someone else
Another way to cash the check with the possibility of not paying such expensive fees is for someone close to you, who does have a bank account, to cash the check at their bank. From the moment the check is not in your possession, you run the risk of it being lost or stolen.
Likewise, you must agree with your acquaintance on when to charge, bringing the relevant identification and above all to resolve doubts if required, in addition to agreeing on how they will finally give you your money.