No bank account? There are still ways to cash a check. We’ve rounded up some of the lowest-cost methods.
Before you go to cash your check, a few pointers:
- Bring identification, such as a state-issued driver’s license or other government ID.
- Just before cashing, endorse the back of the check with your signature on the line with the X.
- Aim to get your own checking account, where you could likely cash checks for free. Read on for tips on getting approved.
Where to cash a check
The bank or credit union that’s on the check: You should be able to cash a check at the financial institution of the person or company that wrote you the check. Banks and credit unions often charge a fee of 1% to 3% of the amount of the check for this service.
Computer-generated paychecks often cost less to cash than personal, handwritten checks. If you were to cash a $500 computer-printed check from your employer at the bank where it was drawn, you’d pay a fee of about 1%, or $5.
Major retailers and grocery stores: Many large merchants provide check-cashing services, generally for less than $10 per check. Wal-Mart, for example, charges a $3 fee to cash checks up to $1,000 and $6 for anything larger.
Prepaid cards: Prepaid debit cards allow you to deposit your check, adding it to the card’s balance, through certain ATMs, via mobile deposit or at some retailers, such as Wal-Mart. Once you load money on the card, you can spend it anywhere that accepts the card’s payment network — often a Visa or MasterCard network. But the card isn’t attached to a checking account and doesn’t help to build credit like a credit card does.
There may be a charge for a deposit to a prepaid card. Cards themselves often cost around $5, and there’s also usually a monthly service fee of about $5.
Where not to cash a check
Payday lending store: For many people, cashing a check is a relatively straightforward transaction, but for nearly 16 million adults who don’t have a bank account, it can be hard to find a place that won’t charge a hefty fee for the service. Payday lending stores, for example, charge up to 10% of the check value. For a $500 check, that’s a fee of $50.
Major retailers and prepaid debit cards are options for cashing a check, but your own bank or credit union is better since it likely won’t charge a fee for the service. Because of this, it’s worth getting a checking account, even if you’ve had trouble with one in the past.
If a financial institution has closed your checking account — because of unpaid overdrafts, for example — it may be hard to open a new account. That’s because you may have a record with ChexSystems, a company that tracks closed checking and savings accounts.
Some banks and credit unions will let you open a second chance checking account. These accounts may come with monthly fees, which can offset some of the money you save by avoiding the payday lender. But if you keep a second chance account in good standing for about a year, you may be able to upgrade to a free regular checking account, which will save more money in the long run.
» MORE: How to write a check
Updated March 20, 2017.