How Bad Are Check-Cashing Fees Really?

Here’s the fees a MoneyGram check-cashing place near me will charge you to cash your checks:

$25 – $1
$50 – $1
$75 – $1.31
$200 – $3.50
$500 – $8.75
$1000 – $17.50
$2000 – $35

That’s about a 1-4% fee. I’ve been against check-cashing places because I hate the idea of paying someone for my own money, but then I got to thinking: how much do you pay in a month in ATM fees? It’s $1.75-$3.50 a pop, plus a ~$2 fee if you’re not going to your own bank’s ATM. Especially if you’re the kind of person who makes multiple small withdrawals, that can really add up. Let’s not forget overdraft fees, low balance fees, fees for them letting you spend more than you have, and the crappy interest offered by most retail banks. So this is not to say that check cashing places are great, but that if you don’t play the game right, a bank can be just as bad.

(Photo: zeebahtronic)

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  1. Nissan288 says:

    i just go to the BOA atms and withdrawl what I need for the week…does the 1.75-3.50 mean a charge that your bank charges for using their atms every month?

  2. That-Dude says:

    I’ve never been to one of these places to actually cash a check. I think I may have purchased a money order once or twice, due to the fact my bank was closed. Anyway, are you able to cash a personal check there? If so, 3.50 for 200 dollars isn’t egregious and like you mentioned may be less than your ATM fee.

  3. SCAdvanced says:

    Walmart will cash a check for a maximum of $5 I think. It’s been a while since I had them do it since I have direct deposit and all.

  4. B says:

    It may not be a ripoff, but it’s still a bad deal. Let’s say you’re one of the unbanked, and you make 250 a week, and are paid by check. Using a check cashing place, you’ll pay $14 a month cashing those checks (assuming you get paid weekly if you get paid every other week, you’ll pay $17.50. That’s a lot more monthly fees than having a checking account.

  5. homersays says:

    I guess it all comes down to how badly you need the money. If you need that check cashed and cannot wait for it to clear, then you are paying for a service and I can fully understand the fees. Same with the ATMs and their fees. If you need money that badly where you cannot get to your own bank, then you are going to pay for the convenience factor.

    I will never use a Chase ATM and pay their $3 surcharge. though….

  6. Pixel says:

    I bank with TD Banknorth, and have no fee for using another bank’s ATM. In fact they refund me the ATM fees charged by other banks. It is incredibly handy as I don’t have to worry about having to find one of “my” ATMs and can just use whatever one is handy.

  7. nonzenze says:

    ETrade checking – unlimited* ATM-fee refunds, no stupid bankers, access to my money anywhere. Every ATM everywhere is part of their network.

    [us.etrade.com]

    *Some asshole on Consumerist is going to withdraw $20 a day everyday for a month until they refuse. Then they will make a big stink about the technical meaning of ‘unlimited’ without even the slightest hint that they should act responsibly, even if someone else is paying.

  8. brent_w says:

    Or worse.

  9. T1nd0g says:

    How much do I pay in monthly ATM fee’s? nothing, haven’t spent a penny in the 11 years since I registered my Washington Mutual(WAMU) checking account. Not a single fee ever.

  10. zentex says:

    My father used to own a check cashing place (and I worked there in my early 20’s). People who have bank accounts…they don’t use these kinda places.

    It’s mostly immigrants who don’t trust the banks and/or the government. Low-income peoples who for one reason or another cannot get a bank account, and obviously people who try to pass bad checks, or stolen checks.

    When we had it going in the mid-to-late-90’s I made dad buy a digital camera ($1K for a sub-megapixel at the time!) and we took pictures of the people the first time, and had them fill out a mini-dossier. Thankfully, we had less than a handful of bad checks and once everything was said and done (litigation) we had only lost about $500 due to bad checks.

    It wasn’t exactly a profit center, but we made some cash for our trouble.

  11. forever_knight says:

    banks serve a purpose but are horrible. paying interest on debt = modern day slavery.

  12. weakdome says:

    @Pixel: are you serious? Who did you have to blow to get them to refund all your ATM fees? They charge me all of my arms and most of my legs to use ATMs that aren’t on whatever crappy network they are on.

  13. bravo369 says:

    I highly recommend for everyone to keep track of the ATM fees they pay (if you don’t do so already). i never thought it was that big of a deal and didn’t realize how often i was going to a different bank’s ATM. Once i saw how much i ‘wasted’ during a 6 month stretch, it all changed and now i spend a quarter of that on fees for an entire year!

  14. samurailynn says:

    I haven’t paid any kind of account fees to a bank in years. I used to use a competitor ATM every now and then (when I couldn’t find my bank’s ATM around) and get slapped with a fee from each of them, but I haven’t even done that in probably 2-3 years. Basically, get direct deposit if possible, if not possible, use a bank that doesn’t charge you to use their ATMs.

  15. lastfm says:

    If you’re qualify, USAA will not charge you for using any ATM, the ATM’s bank charge will be refunded up to ten times per month, for a maximum of $15/month. Pretty sweet, huh?

  16. loganmo says:

    @weakdome:

    I have the same deal with PNC bank-the only thing is I must have direct deposit and use bill pay at least once per month. At the time, there was no min. balance-they still offer the account but it has a min. balance now.

  17. johnva says:

    $1.75-$3.50 per month in ATM fees? Huh?

  18. weakdome says:

    @loganmo: ah. I never bill-pay with banknorth, maybe that’s why. I transfer all my funds to ING, who actually make me feel like a human being. And they give me interest.

  19. Nakko says:

    For a while, I went to Bank of America to cash my paychecks, since that was the bank they were drawn on. They charged a $5 fee, which I always tried to argue out of, but I was never successful. The $5 fee (which is crap!) was still less than a check-cashing place would have charged.

  20. picshereplz says:

    Come on, folks. It’s not that hard to use only your bank’s ATMs or go to a branch.

  21. Shaggy says:

    @nonzenze: Uh, “unlimited” means “unlimited”. If there’s a limit, guess what? It’s not unlimited!

  22. picshereplz says:

    @Nakko: Why didn’t you go to your own bank?

  23. gorckat says:

    The bank my paychecks are drawn on charges $5 to cash it (switched banks, never re-did the direct deposit, sometimes get cash rather than drop it at the new bank) because I don’t have an account there, but its still less than any check cashing place.

  24. nweaver says:

    Nakko: If you are in california, either the bank or your employer must fold and refund that fee if you are cashing your paycheck at the bank it is drawn against.

  25. weakdome says:

    @picshereplz: I used to do this. My bank would not clear my employer’s check in one business day. However, they would clear cash deposits instantly. So I would go next door to the bank my paychecks were drawn against, cash them (for free), and then walk back to my bank and deposit the cash. It would be instantly available in my checking account.
    Now, direct deposit negates the need to do this, but that was why I did it at the time.

  26. nonzenze says:

    shaggy, when you are willing to grow up instead spouting sophomoric crap, let me know. Until then, maybe you could consider that wasting money, even if it’s someone else’s money, does not serve anyone’s interests.

  27. billbillbillbill says:

    I love my Credit Union’s membership in a COOP network with all the other credit unions in my area. I don’t have to look far at all to find a credit union ATM and then it is free. I can’t remember the last time I paid an ATM fee. I also take advantage of the debit card cash back option at stores. Hey, if they are willing to give me cash back, I am perfectly happy to take them up on the service.

  28. I don’t use ATMs. I think they’re Skynet’s way of getting money to finance all its nefarious deeds.

  29. GenXCub says:

    Come to Las Vegas where you’re actually PAID to cash your checks at casinos (free drinks, slot points, etc).

  30. coan_net says:

    How hard it is to find a bank or credit union to join so you can cash checks?

    I personally belong to 2 credit unions, and 2 banks. (with money stashed in accounts in all of them)

    Three I only have saving accounts, or CD’s with them – and there is no fee for all 3 of them to belong to.

    For the 4th one, it is a credit union which I have both a savings & checking, I do pay a $0.40 monthly charge for a printed statement to be mailed to me, which of course covers the postage cost… which actually no longer covers the postage charge…. so they may raise that to $0.50 a month soon I would expect.

    Anyway, point being – why not open a savings account (I think 1 of mine has a $5 minimum balance, another has a $25 minimum balance that you should keep), and then you will have a place to cash your checks for free.

    Anyway, never understood why some would pay ANYTHING to cash a check. (other then maybe it is Sunday, banks closed and you need the cash right then and there….)

  31. KogeLiz says:

    I had to use a check-cashing place.
    This was because I was unable to get a bank account at the time.
    So the fee didn’t matter to me… as it was my only option.

  32. KogeLiz says:

    @coan_net:
    “Anyway, never understood why some would pay ANYTHING to cash a check.”

    Because some of us screw up and are unable to get a bank account… or if we did have a bank account, it gets wiped out by people wanting their money (rightfully so).

    So, it’s really the same thing with people wanting a credit card… but effed up their credit history 5 years ago. They end up with a horrible interest rate and yearly fees. …because, as they see it, thats their only option.

  33. Jeneni says:

    You know, my own bank (Wachovia) charges $5 for a money oder, my boyfriend’s bank (Commerce) changes $4… those little check cashing places… $0.60! Every time I go to the bank (because it’s in walking distance of my home and the check cashing place is not…) I argue with my bank and ask them to waive the fee since it’s absurd that I bank there and get charged for money orders and that if a check cashing place was near by no one would pay it… and every time they say it’s their policy and there’s nothing they can do. And so I continue to literally pay for convenience.

  34. Aut0mat1c says:

    I know it’s evil and all but you can cash your checks at Wal-Mart for a max of 3 bucks. Easy as cheesey.

  35. Mykro says:

    Walmart charges $3 here in Indiana.
    I use them every other thursday because I get off work after my bank is closed, and don’t have time to make it.
    Very nifty and quick.

  36. weakdome says:

    @Jeneni: I haven’t used a money order in a long time. If you’re using them to pay bills, I recommend checking out some of the online banks, ING for one will mail checks to whoever you want. For free. I don’t want to presume, but that’s a good alternative to getting M/Os and you’d probably be getting a better interest rate too…

  37. rhombopteryx says:

    So, in other words – “Bank Fees About as Bad as Check Cashing Scams.”

  38. algormortis says:

    yep, that’s what i do. when i get the check from my “other job”, it’s usually 3am on Friday by the time i leave.

    go to tribal casino 3 miles up road, cash check. no charge, one form of ID, friendly service. pocket half the $10 you would have paid elsewhere to cash a $500 or so check. redeem free coffee voucher, tip $2. go to slot machine, throw in $3, pocket whatever comes out.

    few months back this paid back $250 in the form of “2500 quarters”. usually it comes back as $0 in the form of bupkis, though. nevertheless even if you don’t gamble it the casino doesn’t give a crap and they’ve said as much because the other 9 out of 10 people will and then it’s profit for them.

    take cash, deposit in my credit union’s cash counting ATM, which is right next door. fill up car on the rez where it’s cheaper.

    go home, sleep. wake up saturday and go back to work that night.

  39. LINIS says:

    Here’s an idea – get a free / low fee bank account (yes there are plenty of them out there) and be responsible with your money! Don’t overdraft, don’t use other bank’s ATMs on a regular basis, if ever, and don’t be a moron. Use a freaking credit or debit card to purchase what you need. It is extremely easy to not incur fees at banks. People need to stop expecting financial institutions to hand them every possible service for FREE and take some responsibility for their actions. It is your money but you are paying a fee for certain conveniences – like using another bank’s ATM or overdrafting and thus borrowing the bank’s money. If you don’t like the bank’s terms put your money under your damn mattress.

  40. ezacharyk says:

    Who uses ATMs anymore?

    I haven’t used an ATM since College. Checks and my debit/credit card work for me.

  41. Marce says:

    “I got to thinking: how much do you pay in a month in ATM fees? It’s $1.75-$3.50 a pop, plus a ~$2 fee if you’re not going to your own bank’s ATM.

    Some credit unions use Co-Op Network, so I can use another credit union’s ATM without getting charged for its use.

  42. Jurph says:

    I’m in the same boat as Pixel: a bank with no branches that has decided to make all ATMs free for my use. I get my fees refunded at the end of the month. They also regularly waive fees if I’m doing business by phone because their website doesn’t have a particular option – “We charge the fee to encourage web usage, but if you’ve already looked there, I’ll refund the fee.”

    USAA rocks.

  43. OsiUmenyiora says:

    @forever_knight: Paying interest on debt is slavery? And who exactly besides your mother is going to lend you money if they can’t charge you interest?

    And who the heck is paying $1.75 or more to use the ATM at their own bank? I understand paying to use services at another bank, but a bank where you have an account?

  44. AD8BC says:

    I’ll say it again. In West Michigan go to Macatawa Bank. In Dallas/Houston, go to Bank of Texas. Great service, no fee checking accounts, no minimum balance, no ATM fees, and they refund fees if you use another bank’s ATM. Free cashiers checks. Free change counters (at Bank of Texas) — no more rolling the coins from your change jar….

  45. johnva says:

    @rhombopteryx: Only if you’re irresponsible.

  46. johnva says:

    @forever_knight: No, actually paying interest on debt is one of the main things that makes modern capitalism work.

  47. KogeLiz says:

    @ezacharyk:

    I do. For cabs, tipping hair salons, splitting the cost of dinner or lunch with someone, some of the smaller mom&pop places here in the city and when I don’t want to pay for my 1.00 coffee with a debit card.

  48. Brunette Bookworm says:

    I do the payroll where I work and you wouldn’t believe the number of people who have screwed up their banking history so badly, they can’t get a bank account. We have a lot of employees who use check cashing places since they can’t get bank accounts. Some can still get savings accounts but there are other who are so overdrawn at banks, in the area of over $1000, I don’t know how they aren’t in jail. For these people, check cashing is the only way to get money.

    Yet another reason to be responsible with your money.

    Also, ATM fees? Banks charge fees to use their own ATMs? That’s crazy! I guess my bank is much better than I thought.

  49. jamesmusik says:

    I can’t imagine actually paying to use an ATM at my own bank, especially a per use fee. That’s kind of ridiculous.

    Check cashing places are obviously not for people with checking accounts. They’re for people who for various reasons, be it bad credit, being here illegally, or what have you, can’t get a checking account. Aside from sometimes going to the bank the check was issued from, you can’t cash checks for free without a checking account.

  50. SkyeBlue says:

    A few weeks ago we tried to cash our over $5000.00 tax refund check at a local bank (we didn’t have an account anywhere at the time). The first one we went to tried to charge us 150.00! $150.00 just to cash a government check! The 2nd bank we went to wanted $50.00 and we didn’t cash it there either but did go back and open an account the next day and got it cashed for free, minus the small amount we put into a new savings account we opened, just to avoid having to pay any more check cashing fees in the future.

    Walmart usually charges $3.00 or so to cash a check up to about $1500.00 which isn’t too bad. We did have a check cashing store near us that recenty closed down and it was better to go to them to cash a check for a small amount as they charged by a percentage of the check instead of a flat-rate.

  51. GearheadGeek says:

    @algormortis: Well, 2500 quarters is $625, did some waitress get the $375 you misplaced for helping you carry the quarters to the cashier?

  52. GearheadGeek says:

    @Jeneni: USPS charges $1.05 on money orders up to $500, $1.50 from $500.01-$1000.

  53. ZekeDMS says:

    I can go to Bank of America, with a check from their customers(a paycheck or personal check), for any amount, they charge six bucks. For a 10 dollar check, six bucks.

    It’s actually cheaper for me to cash my check at a cashing place, and I save the 3 bucks in gas anyway :P

  54. mcjake says:

    @GenXCub: Reno, NV is the same thing. Go to the Peppermill Casino and they will give you two drink tokens to cash your check.

  55. SpaceCowgirl01 says:

    I’m all about getting cash back at Target or the grocery store when using my debit card. Just to keep a steady $10-$15 cash on me for vending machines or whatever. I use the ATM like once every two months, only when I think I’ll needing more than $20 cash (if I anticipate spending some dough on souvenirs at a sporting event or something).

  56. gregero says:

    I think you all are missing the point of the troubles that one can find themselves in from using a check cashing place.

    Yes cashing a paycheck or your own check for cash for a reasonable fee is no worse than an ATM fee or whatever. But a regular bank will not cash a check from your own account if there is not enough money (they look at your account balance right then).

    On the other hand most check cashing places will front you the money for the same fee on a post dated check. What happens if that date hits and you don’t have the money? The check places will roll-over the debt you have now incurred with an ever increasing fee structure. Therein lies the real danger. Very similar to what credit card companies were doing by not forcing minimum payments that would create an eventual payoff date (which the gov just made them stop last year).

    On the subject of slavery. Yes debt = slavery in as much as you are pledging your ability to earn money (i.e. working in most cases) to the bank loaning the money and if you define slavery as the lack of freedom (financial in this case). If all of the money you realize from work goes to paying off debt, you are truly enslaved to the bank. You are just a money-mule between your employer and the bank. Instead of whippings you get bad credit, judgments, garnishments, etc. for lack of performance. The pisser here is that most Americans willfully and gleefully trade this freedom for cool stuff (myself included).

    In conclusion… Check-cashing for reasonable fee != bad. Cashing post dated checks and giving their customers the rope to hang themselves with == spotty, still collecting ever increasing fees while watching the hanging == evil, Debt != financial freedom and thus arguably neo-slavery.

  57. ecwis says:

    @ZekeDMS: Are you sure Bank of America charges to cash their own checks? That’s ridiculous but I wouldn’t put it past them…

  58. sam1am says:

    I can second the USAA comment. All ATM charges are refunded to your account at the end of the month up to $15!

  59. CuriousO says:

    My bank refunds me up to $6 per month in ATM fees. The ATM here at work is through IBM credit union and they don’t charge fees to anyone…. so even though IBM doesn’t charge me Wachovia still deposits $6 per month. They =are bound to catch up but in the mean time I will be making $2 every time I take out cash.

  60. spamtasticus says:

    1. Go to sears and buy a safe

    2. Put safe in concrete floor and hide with little door and carpet

    3. Go to bank

    4. Withdraw your money

    5. Exchange it to Euros (the way the dollar is going you are making more money having it in a safe in the form of euros than as dollars in an intrest bearing account. If you think i’m paranoid, just do the math.

  61. scarletvirtue says:

    @KogeLiz: I do the same thing – especially since many cabs (in SF) won’t/ don’t take credit cards, or if they do, it’s only for a $20+ fare. And that seems to only happen going to/ coming from the airport.

    Also, it makes me feel like an idiot if I’d have to bust out the check card for a small purchase – like a can of soda or pack of gum. (Besides, most of the mom-and-pop stores have a minimum, and sometimes a surchage on top of that.)

  62. calstudios says:

    Just use Schwab. No fees at all. None. And they pay 4% interest on checking. Check cashing is for people who don’t have bank accounts.

  63. kdoyle55 says:

    Cant remember the last time is used cash and I’ve only written about 3 checks in my life. Get a bank account and a debit card, dont be stupid, and you wont pay any ridiculous fees.

  64. Matt says:

    Meh, I can’t remember the last time I used a bank. I’ve been using the same check cashing place for about 4 years now. They charge 1.5%.

    As I make more and more money I’ll probably switch to a credit union.

    Screw banks.

  65. lennybee says:

    I’ve never been charged anything to use Fifth Third’s ATMs (where I have a checking account), and I don’t ever use ATMs of any other bank.

    I can’t think of any good reason to use a check cashing store. Open a checking account, put $100 in it to keep the minimum balance, and cash or deposit your checks at the bank. Voila, no stupid fees!

  66. Mr. Gunn says:

    In the states where check-cashing places have been regulated out of business, it has been found that people end up making more in overdraft fees than they were paying in usurious interest and check cashing fees.

    It’s just that the good, upstanding bankers are getting it instead of the dirty, smelly, tow-truck driving check cashing people.