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Some people rely on check cashing stores to cash their payroll, government,
or personal checks. These corner stores charge customers very high fees for
their check cashing needs. If you use check cashing stores, you should be
aware that there are less expensive ways to cash that check.
You can avoid paying high fees by opening or using a basic checking or
savings account at a bank, savings and loan, or credit union. Think about
the costs before using a check cashing store.
The monthly fees for a basic checking account are usually less than the fee
a check cashing store charges to cash just one check. Even if you don't have
an account, most banks, savings and loans, and credit unions will cash
government and payroll checks for less than the check cashing store charges.
If you receive a federal benefit, wage, salary, or retirement benefit, you
can open an Electronic Transfer Account (ETA). Designed by the U.S.
Treasury, an ETA is a new type of bank account that lets you receive your
federal government payments electronically through direct deposit, for a
cost of $3.00 or less. You can make a minimum of four cash withdrawals and
four balance inquiries per month. Check with your local bank to see if it
offers this service and to learn what the specific requirements are to open
an ETA account.
When you use a check cashing store, ask for the fee in dollar amounts. Many
check cashing stores post their fees in percentages, leaving customers
unsure of what it really costs to cash the check. Make sure they tell you
the fee in dollar amounts so you clearly understand the costs.
Insist on an itemized receipt. Many check cashing stores charge different
fees depending on the time of day and the employee who cashes your check.
Ask for an itemized receipt that lists the amount of the check, the fee, and
the amount of cash received. Then compare the amounts with the fees you were
told or that were posted at the store.

Additional Resources

Consumer Federation of America
The Consumer Federation of America surveyed 111 check cashing outlets in 23
of the largest urban areas in 1997 for information on the cost to cash
payroll, government, and personal checks. Survey findings are available on
CFA's Web site. (Adobe Acrobat required.)
URL: http://www.consumerfed.org/ckcasherspr.pdf

Electronic Transfer Account Locator Service
The U.S. Department of Treasury maintains a Web site that explains ETA
accounts - in English and Spanish - and provides a locator service to find
the nearest ETA place offering this service.
URL: http://www.eta-find.gov