When you have a bank account and receive a check, it's easy. You open up the app and snap some photos. If your bank doesn't have an app, you take it to the branch and hand it to a teller or use the ATM.
What if you're one of the many millions of people who are “unbanked” – without a bank account? The answer is trickier.
Here are the ways you cash a check, from cheapest to most expensive:
Costco, BJ's Wholesale, Sam's Club
None of them cash checks!
One of my favorite stores is Costco and it turns out that Costco does not cash checks. The same holds true for their two wholesale club competitors. BJ'S Wholesale Club and Sam's Club do not cash checks either of any kind.
What is surprising is that they don't cash business checks, payroll checks, or even government checks (and obviously personal checks). I thought they'd at least take government checks as they are the safest, but nope!
The Issuing Bank or Credit Union
Go to the bank that issued the check – their information is on the check itself. They can verify the check's legitimacy, whether funds are available, and will give you cash for a fee. The fee varies from bank to bank.
This is the cheapest option, especially for non-official checks. In some cases, it's free (sometimes only free if under a certain dollar amount).
For example, Bank of America charges a flat $6 fee to cash one of their checks. Capital One charges $0. M&T Bank will charges you 2% of the check amount with a $3 minimum. Call a local branch to find out their exact fee for your check.
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Wal-Mart (or Grocery Store)
Wal-mart offers in-store check cashing of Payroll checks, Government checks, Tax checks, Cashier's Checks, Insurance settlement checks, 401(k), retirement distribution checks, and MoneyGram money orders that were purchased at Walmart. They will not cash a personal check.
The fees are straightforward: $3 for checks of $1,000 or less and $6 for those above $1,000 and under $5,000.
If you have a 7-Eleven nearby and they have a Vcom check-cashing kiosk, you can cash a check there too. The Vcom check-cashing kiosk is an automated touch-screen kiosk that can handle a variety of financial tasks from cashing checks to paying bills.
You can find out more here.
Prepaid Debit Cards
If you are using a prepaid debit card (a.k.a. reloadable debit cards), like Netspend (see how you can get $20 from a referral to NetSpend) or Bluebird by American Express, you may be able to deposit your check as a reload.
To make the transaction, use their mobile app (if they have one) or go to a partner location that lets you perform the reload. If this is a payroll check, consider direct deposit reloads as a way to avoid the reload fee (if you have a direct deposit, it may be worth getting a checking account).
Prepaid debit cards can get expensive, with transaction fees and activity fees, but if you use it wisely it can offer a cheap way to cash checks.
Check Cashing Store
These will be the most expensive option but if you have a personal check and no local bank, it might be the only option.
Cash advance, title loans, payday loan stores – they're all names for the same type of outfit. Expensive short term loans with high fees and punitive interest rates. They also cash checks.
Whereas Wal-Mart only takes institutional checks, many of these places will take personal checks too. Some will require you get a credit check, since it amounts to a short term loan, while others won't. Call around to see what the policies and fees are.
A local cash checking place in Maryland charges a flat 10% fee to cash a personal check. They do the work of calling the issuing bank and confirming funds before they cash you out – sometimes you have to get their debit card too. In this store's process, they need to talk to the person who wrote the check too.
Other places may charge a flat fee with a percentage on top – like $5 per check plus 1%, perhaps with a minimum fee. Call to confirm the details.
Those are the few options you have for cashing a check – as you can see, some are better than others!