Federal Reserve research shows that there are more than 55 million unbanked or unbanked adults in the United States. This staggering figure represents more than 22 percent of households, with Mississippi leading with more than 16 percent of all adults who do not have access to banking services, and depend on the cash to survive in life.
Another report shows that the national rate of unbanked adults currently stands at 7.7 percent, which means that almost 18 million adults in the United States do not have a bank account. People who have a bank account may wonder how these people manage to survive. However, as a result, it is possible to live a normal life in the United States, without a bank account.
Owning a bank account makes life easier. The start of Internet banking available through smartphone applications makes it easy to send and receive funds from anywhere in the country that has a Wi-Fi connection. Paying bills, paying off your mortgage and paying student loans is much easier with a bank account, but it is not necessary to have an account to fulfill these tasks.
If you are one of the millions of people with or without a bank account, you may wonder how you plan to collect your paycheck at the end of the month. However, you do not need a bank account to access your earnings.
Here are some methods you can use to cash your check and get your money.
Reasons why people remain without bank access
A recent survey of unbanked people cites lack of confidence in the government and the banking system as the main reason why people refrain from opening a bank account. The wake of the 2008 financial crisis left millions of people feeling insecure about the intentions and ethics of the big banks and corporations that were to blame for causing the collapse that shook the economy.
In the last 11 years since the collapse of Lehman Brothers that caused the conflagration, confidence in the banking sector is still compromised, and many unbanked people believe that if they leave their money in the bank, the corporation will steal it at the advent of Another crisis
These people may have a point. The federal government uses FDIC insurance (The Federal Deposit Insurance Company) to guarantee the deposits of account holders in most major banks.
However, with the billions of dollars that accumulate in bank accounts, one wonders how the federal government can pay all the money to account holders. This situation seems somewhat ridiculous when it is considered that the government would need to rescue both the account holders and the banks themselves in case of another crisis.
Read: AXOS Bank, Easy to apply online banking
Do I need an ID to cash a check?
Before starting to give you methods to cash your checks, you may wonder if you need some type of identification when you arrive at the cashier. The answer is yes; You require identification in most cases when cashing a check. Therefore, if you are an unbanked individual and do not have any type of identification, you may find it difficult to collect.
However, there are solutions to this problem. You can sign your check with someone you trust, such as a family member, and ask them to charge it for you, creating a third-party check. In some cases, the bank teller may require you to be present while your family member or friend collects the check. Some banks also offer the possibility to cash checks through an ATM, which allows your friend or family member to cash it for you.
Ways to cash a check if you don't have a bank account
Visit a branch of the issuing bank
Most banks will allow you to collect payroll and personal checks issued from your accounts. As an additional bonus, you will not have to visit the original branch of the check holder; You can do it from your local bank branch.
The disadvantage of this service offered by banks is that they will charge a service fee for completing the transaction. Most banks charge between $ 4 and $ 10 to cash a check. The bank charges fees to cover the costs related to the processing of the transaction. The only bank that does not charge a fee for collecting your payroll or personal checks is Capital One. Capital One has an exchange rate without checks, regardless of the branch you visit. Therefore, if your employer has an account with this bank, it can save you hundreds of dollars in costs during the work year.
Some banks may void the check cashing fee if the amount is below a certain minimum, but each bank differs by this threshold, so it is better to ask them about the fees involved in the transaction before committing to cash your check. Some banks may offer to open an account to cancel the check exchange rate.
Read: How many bank accounts should you have?
Change your check at a retail store
With the retail sector experiencing the biggest decline in history, they are diversifying their strategies to include some banking facilities. It is now possible to cash checks at a variety of retailers across the country. Here are our 4 best options to cash your check with a retailer.
- Walmart – The kings of the retail game now include changing checks as a service for their customers. Visit a Walmart on payday and you will surely see some people cash checks at the cashier. Walmart allows you to collect government checks, taxes, 401 (k) distribution, insurance, personal settlement and payroll checks worth $ 5,000, with two-party checks that have a limit of $ 200 per transaction. Walmart charges a flat fee for cashing checks of up to $ 1,000, and the rate is doubled for any amount that exceeds this threshold.
- Kmart – If you are a member of "Shop Your Way" at Kmart, the retailer allows you to collect payroll, tax refund and government checks up to $ 2,000. Kmart also allows bipartite checks of up to $ 500. Kmart also charges a fee for all checks it collects in cash with the retailer, but is generally lower than the bank and many other retailers.
- Money services – Fred Meyer, Kroger, Fry & # 39; s and Ralph’s have money store outlets. You can use Money Services to collect payroll checks, tax reimbursement, government, business and insurance settlement, up to a value of $ 5,000. Interestingly, Money Services does not accept personal checks. You must also pay a fee to collect with this retailer.
- Lion food – This retailer collects printed payroll checks, as well as traveler's checks, tax reimbursement and cash reimbursement checks. The retailer has a limit of $ 1,000 for all checks other than traveler's checks, which have a limit of $ 499.99. Food Lion will not accept personal, two-part, or handwritten payroll checks.
Open a debit card account without checks
An overdraft debit card account without checks is an affordable option for people who do not have a bank account and need to cash their checks. This service is available to everyone, even if the credit agencies blacklisted it. The "Access Account" of Citibank and the "Account without complications" of KeyBank are viable options for people who do not have access to banking services.
These accounts also allow you to deposit your check on your debit card, using your smartphone. If you open one of these accounts, you must pay a monthly maintenance fee for the service. However, the monthly maintenance fee is much lower than charging at a retail store or bank, especially if you are collecting multiple payroll checks over the course of the year.
Let a friend change your check for you
If you have a family member or friend you trust, you can hand them your check and let them charge it for you. You must endorse the check in your name by typing "Pay on the order of (person's name)" and then sign the check. The bank or retailer then collects the check without additional charges involved.
Load the check on a prepaid card
It is possible to use a prepaid debit card to cash your check by depositing the check at an authorized agent, such as a retailer or bank, and then using the prepaid card to withdraw cash at the ATM. Some prepaid cards also offer a mobile check deposit feature, allowing users to take a photo of the check with their smartphone and deposit the check on their debit card.
However, it is important to keep in mind that these mobile services often charge very high fees, so it may not be worth following this route if you are concerned about the costs involved in the process. Some rates vary depending on the type of service. For example, if you want a standard transfer, it could cost you as little as 95 cents, but an expedited payment can cost you $ 5.95.
Use a payroll debit card
Some employers offer the service of providing their employees with a payroll debit card. The employer charges his salary on the card, instead of issuing a paycheck. The card is reusable and accepted at all retailers. Some retailers also offer this service, with Walgreens, Walmart and even Taco Bell providing this service to customers.
However, once again, these cards may come with additional fees and hidden charges that eliminate a considerable part of your payment.
Visit a payday lender
You can take advantage of payday lenders if you need to cash your check. Most lenders have this service included in their service branch, but at a cost significantly higher than retailers or banks.
If you have ever applied for a payday loan, then you know that it comes with outrageously high interest rates to keep you in debt to the lender through a continuous cycle of high interest payments.
Some payday lenders may charge a percentage of the value of the check, or a flat rate, depending on the amount. Payday lenders are well known for executing predatory loan tactics, so you should expect the same when cashing your checks at these establishments.
For this reason, we recommend payday lenders as a last resort to cash your checks. Instead, take the extra time to visit a retailer or bank, and save more of your money.
Read: Are payday loans a good idea?
Compare cheaper prices
Regardless of the method you decide to use to cash your check, it is a prudent financial measure to verify the best price for the rates of retailers, banks and other ATMs in your local area. Call the branches of your local bank and request your fee schedule to collect checks, and compare the best rates of your available options.
Take precautions with your check
When you receive a check, be sure to trust the person who writes it. While this is not a big concern for payroll checks, accepting personal checks from people you don't know can be risky. There is no way to verify the validity of the person issuing the check, and they can also use fraudulent identification documents to scam you of your possessions, money and time.
While there is a significant level of risk when accepting checks, you can follow these steps to mitigate that risk.
- Be sure to get the issuer's first and last name and compare it with a valid identity document.
- Be sure to get your cell phone number and physical address for reference purposes, and call the number to verify if it is valid before accepting the check.
- If you have the time and resources, you can call the bank and speak with a service consultant who will confirm if the account holder has the funds available to cover the amount of the check.
To conclude: consider opening a bank account
While it is possible to cash your check with any of the methods mentioned in this article, we recommend that you seriously consider opening a bank account. Having an account in a large financial institution gives you many lifestyle benefits. Every American has a credit score, and if he remains without bank access, he can never request any line of credit.
Banks and lenders rely on your credit report and credit score when they evaluate you for a loan. If you remain without bank access, your credit score will never evolve. This situation may make it difficult to obtain a personal loan, a car loan or a mortgage in the future.
With a low credit score, it can also be difficult for you to get a lease from an apartment, get insurance coverage or apply for a student loan. While there is some risk in owning a bank account, it is a lifestyle convenience that we all need as we move towards 2020.
Disclaimer: The opinions expressed herein are only those of the author, not those of any bank or credit card issuer and have not been reviewed, approved or endorsed by any of these entities.
Disclaimer: The answers below are not provided or commissioned by the bank advertiser. The responses have not been reviewed, approved or supported by the bank advertiser. It is not the responsibility of the bank advertiser to ensure that all publications and / or questions are answered.[ad_2]