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There are some people who don't have a bank account because they wouldn't be able to avoid the monthly fees. If you don't get paid regularly via direct deposit and aren't in a situation where you can keep a high daily balance, monthly fees can really eat into your cash flow. For example, my bank requires at least 1 direct deposit or a daily balance of $1500, otherwise a $12 fee applies every month. If your job doesn't offer direct deposit, or you expect to have less than $1500 any day of the month, you would be better off cashing your occasional check for a small fee than subjecting yourself to a maintenance fee every month.
I see these places all around, usually in or on the edge of downwardly mobile-slash-scary-slash-cheesy neighborhoods. Sometimes they are combined with pawn brokers or bail bondsmen. They have really tacky neon signs flashing that they will cash your check, or buy your gold & silver.
Have you EVER felt it necessary to go into one of these places? Can anyone go into a place like that and not feel "dirty?"
I do watch Pawn Stars on the History Channel, so I do see the legitimacy of some pawn brokers, in buying and selling antiques & collectibles. But when it comes to people pawning their crappy stuff to pay a bill or pay off a bookie....no.
And why on earth would someone need to cash a check at a place like that? If you can't get a bank account, something's seriously wrong, right? You're either an illegal alien (and haven't figured out that you can get a bank account despite that), or you're on the run from the law. Or maybe the check you are trying to cash maybe isn't written out to you (meaning you stole it or "found" it) or it's from an unseemly source.
Maybe I'm missing something. Is there any legitmate reason you would need to cash a check at a check-cashing place?
Or you're such a deadbeat no bank will give you a checking account.
Yup. Or maybe you do have a bank account, but it has been levied, so any deposit is immediately snatched away.
Or maybe you're under 18 and can't open an acct without parental consent, or maybe you're a conspiracy theorist that thinks the bank is plotting to take your money, or maybe your bank isn't open when you get off work, or maybe it's just a habit.
The thing is...the dog will give you a lifetime of love and devotion and never ask for anything more than pat on the head and a toss of a stick.
A person will take your 5k, blow it on cheap booze and condoms, then come back asking for more $.
I choose the dog.
I would, too. We had friends that got themselves into a financial pickle, and we lent them money several times and got paid back... but the last time was the most and we lost it. Like 800 bucks.
It's a drop in the bucket for us... but still. All sorts of reasons we werern't getting our money and maybe a 20 here and there, and they still made it feel like they were still in such trouble.
So I didn't feel too badly about it until the day I went to their house for a party for their kids and found out by overhearing -- they owed money to EVERYONE. Like 10's of thousands of dollars.
Then I felt like a sucker. That was the end of that friendship -- and yes -- as they wound they way through their family, with one after the other giving them the cold shoulder they finally realized they had to live within their means.... but not until burning most of their bridges.
There are some people who don't have a bank account because they wouldn't be able to avoid the monthly fees. If you don't get paid regularly via direct deposit and aren't in a situation where you can keep a high daily balance, monthly fees can really eat into your cash flow. For example, my bank requires at least 1 direct deposit or a daily balance of $1500, otherwise a $12 fee applies every month. If your job doesn't offer direct deposit, or you expect to have less than $1500 any day of the month, you would be better off cashing your occasional check for a small fee than subjecting yourself to a maintenance fee every month.
Depending on how much you make the check cashing fees can be more than $12 a month. I just did a Google search and the first place that came up had their fee posted, 1.98%. So even if you only worked part-time and made $1000 a month you'd be paying $19.80 each month to cash your checks.
And there are plenty of banks that won't charge fees. Because I moved around frequently for years with my job I kept my main account at my hometown bank and opened accounts close to where I lived so I could deposit any paper checks I might get and transfer the money to my main account. I've never had direct deposit on any of them and seldom keep much money in there (about $3 currently) but have never paid a fee.
Legitmate reason? No. These places are predatory and should be illegal.
In my area, there is a high Hispanic population who are 1st generation Americans or here illegally (which is another subject altogether I am not trying to instigage a debate about here). Many of these "cash express" places are in highly Hispanic neighborhoods where there are not a lot of Chase/ BOA/ Citi/ Regional Banks. I honestly believe they go there because 1) the people speak Spanish, 2) they don't quite understand what they're getting into, 3) they're stuck in the cycle- realize it's bad - but can't get out from under it, or 4) there are no other "banks" close by and it's a hassle to walk or take a bus 3-4 miles away.
A lot of these people don't have bank accounts, no checks, no credit cards. They live "cash only" lives because they understand cash. So yes, I can see the "reason" for getting an advance if you've spent all your cash and you don't get paid for 5 more days and have no food or toilet paper or whatever.
Doesn't make it right or "reasonable", but I do understand it.
I don't think they're predatory, but they do earn a living off the financially stupid. This is a reason finance should be a required class taught every year in grade school through high school.
The financially stupid don't understand interest, or compounding interest and pretty soon, they end up in a heap of financial trouble wondering how they got there.
I see these places all around, usually in or on the edge of downwardly mobile-slash-scary-slash-cheesy neighborhoods. Sometimes they are combined with pawn brokers or bail bondsmen. They have really tacky neon signs flashing that they will cash your check, or buy your gold & silver.
Have you EVER felt it necessary to go into one of these places? Can anyone go into a place like that and not feel "dirty?"
I do watch Pawn Stars on the History Channel, so I do see the legitimacy of some pawn brokers, in buying and selling antiques & collectibles. But when it comes to people pawning their crappy stuff to pay a bill or pay off a bookie....no.
And why on earth would someone need to cash a check at a place like that? If you can't get a bank account, something's seriously wrong, right? You're either an illegal alien (and haven't figured out that you can get a bank account despite that), or you're on the run from the law. Or maybe the check you are trying to cash maybe isn't written out to you (meaning you stole it or "found" it) or it's from an unseemly source.
Maybe I'm missing something. Is there any legitmate reason you would need to cash a check at a check-cashing place?
Millions of Americans do not have bank checking accounts, which is how most of us negotiate checks we receive. Many of the 'unbanked' do not currently qualify to open a bank account, often because a previous banking relationship left them with an outstanding unpaid negative balance.
When banks close an account with a negative balance, they report that to a company called ChexSystems. When the offending deadbeat tres to open an account at a diffferent bank, the bank learns of the Chexsystems report and refuses to open an accoiunt for this person.
These adverse ChexSystem reports drop off their system after five years, at which time banks will open account for this person.
Hence, for the foreseeable future there will continue to be many Americans without bank accounts, and check cashing services will continue to serve this population for a fee.
I don't think they're predatory, but they do earn a living off the financially stupid. This is a reason finance should be a required class taught every year in grade school through high school.
The financially stupid don't understand interest, or compounding interest and pretty soon, they end up in a heap of financial trouble wondering how they got there.
??? If you get sick and land in hospital and can't work and thus have no income and you have automatic billpaying and the automatic debits bounce (because without income you can't pay them) and the bank charges you fees you can't pay and then closes your account and reports you to ChexSystems (so that when you return to work you can't open a new account), are you financially stupid?
But it appears people knowingly get into this kind of debt. If someone voluntarily wants to pay $80 in interest on a $300 loan, that sounds pretty stupid to me, but I guess they should be able to have someone happy to make that loan.
I just question the "emergencies" these folks get into. There's no legotimate $300 debt that couldn't really wait a week or two, unless its a bookie or someone who will "break your kneecaps." If it's the electric bill, they'll let you pay a late fee. If it's a medical bill (what medical bill is only $300?) they'll let you pay in installments.
While I think these are disreputable businesses, I would not advocate for their not being allowed by law to operate. It's the free market, and supply & demand. I've just never felt the "demand" for such a service, and would not think very highly of someone who did. I have plenty of legitmate ways to scrape up $300 if I needed to.
??? When your alternatives are, say, get electricity/gas shut off or get evicted, or maybe not pay to fix the car you need to get to work, you're not gonna pay that $80 to buy another few weeks?
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