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Better Business Bureau ®
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In New Mexico and Southwest Colorado

Educational Consumer Tips

Check Cashing

Author: Better Business Bureau
Published:
Category: Finance

Check cashing companies offer immediate cash in return for a check, which they do not deposit for a period of up to two weeks. Fees may be as high as $15 per $100. For example, you would get $425 for a $500 check. If you compare this cost with interest rates for other forms of credit, you will find that it is higher than cash advances against credit cards.

If you have decided to use a check cashing company, take your time. Ask questions about what the penalties are if you do not make the necessary bank deposit in time. If you fail, you will jeopardize your opportunity to get a satisfactory credit rating for loans at better rates. Before using these services, carefully reconsider your purpose in borrowing and have a realistic expectation of future income. If you do not have a concrete plan for repaying this money, there is a danger that you will wind up borrowing even more, perhaps from another check cashing company, to pay off the first one.

If you cannot qualify for conventional loans or credit at other places, get expert consumer assistance from any of the family service centers in the area.