What is it with these "checks cashed" places? (loans, calculate)

[vegaspilgrim]

What is it with these "checks cashed" places? They have these totally corny names like "Money Mart," "Cool Ca$h," "Payday Advance," "Check into Ca$h" (sic). Where I live they are all over the place-- every single strip mall-- sometimes even two of them in the same shopping center! I don't understand why anybody would go to one of these, instead of cashing your check in a normal bank account. What kind of people go in those stores? How do these "businesses" operate?

[dreamofmonterey]

Originally Posted by vegaspilgrim

What is it with these "checks cashed" places? They have these totally corny names like "Money Mart," "Cool Ca$h," "Payday Advance," "Check into Ca$h" (sic). Where I live they are all over the place-- every single strip mall-- sometimes even two of them in the same shopping center! I don't understand why anybody would go to one of these, instead of cashing your check in a normal bank account. What kind of people go in those stores? How do these "businesses" operate?

apparently. Alot of poor people who cant get a checking acct go in there to cash their checks. Cash Advance also- so people dont have to starve-before their next paycheck. I think they have one in Wal-mart. If not-they should.

s.

[Lauri_25ny]

I didn't work at any of those type places, but I worked at the customer service desk of a grocery store. We cashed paychecks. In most of the cases, it was people that either didn't have, or couldn't get a bank account or people that were living paycheck to paycheck.

One guy told me that he couldn't put his paycheck in the bank because the gov't would take it and his wages were already garnished. I never asked, he just told me that after he started griping because we charged $1 to cash the check and I told him that he could cash it at his bank for nothing.

Personally, i'm not going anywhere that charges me a buck to cash my check. That's my dollar, damnit!

As for those other places, i'm pretty sure they take a % but I really don't know that much about it.

[Racelady88]

Those places and the title loan places are everywhere. Some of them charge over 60% interest on a payday or title loan.

[sunsprit]

Many people prefer not to have a "banking relationship" for various reasons, which are as simple as religious preferences, distrust of banks, or they may work at temporary jobsites, like construction workers who will not be staying in an area long enough to justify opening a local bank account. Garnishments, judgements against them, child/ex spouse support, or other financial reasons may also explain why they don't want their money to go through the hands of others/banks who must divert it by court order to other uses.

They're not necessarily "working poor", but need to be able to cash their checks to have access to their funds just like anybody else. I've seen people who earn over $1,000/week use these check cashing services.

I knew of a realtor who used these services to cash commission checks so they didn't show a regular employment income ... to dodge out on their child support payment; those checks could be in 5 figures. It's a high price to pay to dodge the legal system and their responsibility, but it's their choice to do so and pay cash or money orders for everything they buy or rent.

Of course, part of the business is "payday advance" loans, where a customer essentially writes themself a non-secured loan by using a post-dated check. There is a typically very high interest rate on the loan, but some folks need the money now and cannot get it through a conventional lender. Same reason pawn shops can do a lucrative business in many areas.

[cdelena]

An acquaintance of mine runs a number of branches in Texas. He says the huge influx of immigrants will only use cash and are not even familiar with other options. He claims that more than 80% of the customers are not in the country legally.

[belovenow]

Originally Posted by Lauri_25ny

In most of the cases, it was people that either didn't have, or couldn't get a bank account or people that were living paycheck to paycheck.

One guy told me that he couldn't put his paycheck in the bank because the gov't would take it and his wages were already garnished. I never asked, he just told me that after he started griping because we charged $1 to cash the check and I told him that he could cash it at his bank for nothing.

The above are the exact reasons why these Check Cashing places exist and by the way, why they are extremely successful/lucrative businesses. They charge a fee for the check cashing, and anyone from illegals, to just poor people living paycheck to paycheck use them.

[christina0001]

Many reasons, as listed above:
1. Can't get a checking account due to immigration status
2. On welfare and have to make sure the government doesn't see any income
3. Owe child support or taxes; if they open a bank account, any funds will be garnished
4. If you bounce enough checks, you won't be able to open a bank account

[taigagirl]

Here is how at least one of these "lenders" work because I have done debt counselling:

Example: On a Monday, I get paid and my net for one week is $300.00. I am allowed to borrow up to 50% of my net paycheque ($150.00). By the following week the borrower owes the payday loan company 265.00. Of course (usually) the borrower cannot pay them back seven days later so they tack on admin fees, interest, etc., and/or rewrite the loan. The interest has been calculated to be 60% up and higher. There is no credit check, etc. Some people run from company to company every single week borrowing on the same paycheque. And if you get paid bi-weekly, same formula, only higher interest accumulates because of the length of the loan.

The main reasons I have seen people borrow in drug/alcohol addiction, gambling addictions, bad credit, no established credit, need cash fast and can't get it anywhere else or is too embarassed to ask for help. Sometimes spouses will borrow without the other spouse's knowledge. The other biggest reason is people living far beyond their means. I have seen people from every walk of life use these payday companies every single week. I have had family members cry in front of me because they have begged companies not to re-loan after they have paid off loved one's debts for whatever reason.

In my humble opinion, legalized loansharking....

[vegaspilgrim]

If all those factors are true, I don't understand why these checks cashing places are not illegal. These establishments seem to go hand in hand with illegal immigration, white collar crime, poverty, and urban blight.