If you want to use a check-cashing facility instead of a bank, it will cost you for the convenience. Fees, which are set by state law, can range from 1 percent to upwards of 10 percent, depending on the amount of your check.
However, the convenience a check-cashing facility offers may be worth it to you. Most of these facilities, including currency exchanges, are open longer hours than banks, so you may have easier access to your money. Some currency exchanges allow you to have your paycheck direct-deposited to them; they will then provide you with a pre-loaded ATM card that you can pick up at the facility. Note that fees still apply with this option.
Using a check-cashing facility instead of a bank is also a way to avoid paying bounced check fees. If you only work with the cash from the service, you don’t have to balance a checkbook or worry about having enough money in your account to cover a payment.
However, there can be big drawbacks to not having a bank account.
A check-cashing service can also double as a short-term loan facility. The service may offer an advance on your paycheck in return for a percentage of the check. But be careful—the interest rates on these types of loans are often very high and may exceed what you would pay on a credit card. You can also get quickly caught up in a nasty cycle of needing money in advance of your paycheck and losing more cash each time you get a quick loan.
Instead of using a check-cashing service, you may be better off setting up a bank account with direct deposit that doesn’t have any fees or that has fees that are lower than a service would charge. Additionally, take the time to investigate the many free banking options online that can give you a safe place to save your money.