View random article

What Is a Check Cashing Service?

A check cashing service is a particular type of service given by a company for the purpose of cashing a person’s check. The company earns from the process by imposing a fee for each check cashed. Personal banks cash checks as one of its services and it usually does this with no additional cost to the customer. But a check cashing service that is offered by a check cashing company has an additional feature – it also serves as a short-term loan facility. The company offers money as an advance to a person’s paycheck. They do this in exchange for a certain percentage of that paycheck when it arrives.

The check cashing service effectively earns money through each cashed check, whether as an advance to a short-term loan or through getting the percentage of a cashed check. Using a check cashing service still needs documentation just like in a bank. The customer will need to present identification or it will not accept personal checks. There are some companies that offer the option of a direct deposit, in which the money is put into an ATM card and the customer has to pick it up in the check cashing service office. For those who do not earn a lot of money, it may be possible that the cost of cashing the check in a month will be equal to bank fees paid.

Check cashing services are a popular option to many customers despite the additional fees because it is a convenient service and gives customers the opportunity to cash their checks immediately.

Featured in Finance