For most people, cashing a check is a simple thing to do. They just drive through an ATM or a drive-up teller at their bank, sign the back of the check to endorse it, and voila! Money in hand.
If you don’t have a bank account, don’t worry, you’re not alone. At least ¼ of U.S. households either don’t have one, or they head to other places to cash their checks. If you fall into this category, there are plenty of affordable, fast options for turning that check into cold hard cash.
However, there is something to ask yourself before you look for a place to cash that check. If you have a check that is a few hundred dollars and up, consider why you are cashing it rather than depositing it!
Sure, if it’s a birthday check for $25 from Aunt Martha, you may want to go ahead and cash it and buy pizza. But if it’s a business or payroll check, ask yourself, do you really want to be carrying around that much cash? Extra cash on hand can be dangerous unless you’re using it for a major purchase, such as a security deposit on an apartment, or a car. If you don’t have a reason for all that cash, beware of the temptation to impulse spend.
Although most people have bank accounts, there are understandable reasons why you may not have one. Maybe you’re just starting out in a job. Or your credit isn’t stellar. Or you don’t think you have the time to read all the fine print and make a choice with all the options out there.
For any venue at which you plan to cash a check, make sure you have proper ID, or chances are good you will be turned away. Some examples of this are a driver’s license, state-issued ID, military ID or U.S. passport.
So, here are some ways to cash a check if you don't have a bank account:
Many stores and grocery markets will cash checks for you.
You may have to stand in line at the customer service desk, but otherwise it will be quick and efficient. Some places may put a maximum on checks. For example, they may only cash checks less than $500. It all depends on the store. There will likely be small fees attached to the transaction, ranging from a few dollars to twenty-five bucks. Sometimes the fees will be a percentage of the value of the check.
But keep in mind, cashing a check in a retail or grocery store can be dangerous if you are susceptible to impulse buying! Head straight to the store’s exit, and don’t be distracted by the two-for-one packages of cookies or the 24-cans of Pepsi. You are committing two no-no’s in this scenario: buying on impulse, and shopping without a grocery list.
Always remind yourself that cash needs to be part of your weekly or monthly budget. It is not disposable income. If it’s a paycheck, you worked hard for that money. If it is a refund on something you bought, you can and should funnel that back into your budget for necessary large items.
Take a look at the check and see where it came from, then head to the closest branch.
You will need to go to the drive-through or into the bank to cash your check because you don’t have an ATM card there. There may be a line, but that’s what ear buds are for. Or practice your deep breathing meditation.
One advantage of visiting a branch of the bank that issued the check is that they can check the account it is drawn from to make sure the funds are available. This protects you and the person or business that wrote it from falling into the costly bounced check status.
Once you get to the teller, be ready for a hard sell! Many bank people earn commissions for each new account they open. Dig in your feet and politely decline if you honestly do not want to open an account at that particular bank. Before you make any financial decision, you always want to do the homework. You want to check the interest rates and other perks of opening accounts at competing banks first.
Remember, even if they offer an umbrella, cup holder or cooler with the bank’s logo on it, don’t fall for the freebies! Make all financial decisions based on facts and comparison.
If you want to skip the hassle of going through this process to cash a check, but aren’t ready to open a regular checking account, there is another good option for you.
This is known as a third-party transaction. If you know someone in good standing with a bank or credit union, such as a parent or other relative, you can endorse the check over to them on the back side by writing “Payable only to” their name. Then add your signature underneath,
Just make sure they don’t take the money and run! (Kidding... unless you’ve signed the check over to someone unreliable, which we know you would not do).
Whatever you decide, as with every spending decision you make, be sure you shop around for the best offers and lowest fees. There are plenty of choices out there today! If you frequently use alternative methods of cashing checks, you should research locations near where you live or work, with the cheapest fees, so you'll know where to go whenever you need to cash that personal or business check.
Cashing a check can be done, but there is a pretty good chance you will be charged fees. They may be small, but like everything, they will add up.
In the long run, it’s best to make a more permanent decision about where to keep your money, whether it’s a bank or into investments. Turning checks into cash should probably be only a short-term solution to your financial future.