Some financial transactions are evolving and are making people very happy due to the conveniences enjoyed from this evolution. One concrete example of this is with check cashing. In the days of old, the normal transaction for this activity involves the check holder whose name appears on the face of the check to visit the designated bank in order to convert the funds into cash.
Disadvantages of the Traditional Check Encashment
However, the old and usual method of converting the check into cash poses lots of problems for the check bearer.
- There is a need to travel to far places if and when the designated bank doesn’t have a satellite office, branch operations, or accredited encashment or remittance offices.
- It is tedious especially if you are a busy person or suffering from mobility issues as you need to fall in line and wait for your turn. It is good if there are no queues but if it so happens that the designated bank is a very popular one, chances are that clients falling in line is the order of the day. You can just imagine your headache spending one whole day and you have lots of appointments to catch up.
Risks Involved with Check Cashing
Check to cash offers not only an alternative means to get cash but also numerous conveniences by addressing many inherent disadvantages attached to it. However, these amenities come with a price also. It is risky. The first risk that you should take note of is the discount rate, service fees, and other hidden charges. When you convert your checks using a check cashing kiosk, you will not receive the full amount indicated as the face value of your check. The check cashing company will deduct several fees as part of their income and services.
Another risk involved is one that you should be very careful of. When you transact business with a check cashing kiosk or company, you end up filling some forms which will require you to reveal personal data like your social security numbers and relevant info on your profile. Unfortunately, the information gave is very attractive to such companies as many of them sell the data to interested parties like loan companies, to your disadvantage. Thus, some of the people who used check-cashing business may find their profile stolen and their financial integrity compromised.
What You Should Do
Just because there are disadvantages and risks involved, you should stay away from this service. There are things you can do to make it work for your advantage. First, you need to determine if you really need the money pronto; otherwise, take your time and find ways to have it converted with the designated bank. This way, you will not be forced to reveal personal and confidential data except with the assigned bank. Second, you need to shop around also so you end up with check cashing companies that do not only offer lower fees but are trustworthy that they remain ethical when it comes to checking cashing operations.
