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205 Comments
- Cancerkitty, on 03/18/2009, -4/+83How else would we hold down minorities? Muh-hahahah!
- AmyVernon, on 03/18/2009, -4/+67There are, unfortunately, neighborhoods where banks won't open branches b/c there's not enough money in it. So these stores fill the void.
- inactive, on 03/19/2009, -0/+48If you don't have a phone number or an address they won't give you an account. One bank near me had a fit because I dumped my land line their policy states that you can't use a cell phone for your contact number.
- inactive, on 03/20/2009, -0/+41A. Illegal immigrants tend to not get bank accounts
B. Some people don't trust banks
C. Some people don't really have enough money to keep their cash in bank aka when you live paycheck to paycheck. - ravage86, on 03/20/2009, -2/+34What's a land line? Is that some obscure cell phone alternative?
- StateTheObvious, on 03/18/2009, -5/+36I come from a part of the country where it is normal to get your paycheck cashed for free at the corner convenience store. Yes, convenience stores would keep $10k-30k on hand to cash checks. They didn't have to worry about being robbed because all the employees are armed to the teeth (albeit their weapons are hidden). It worked for them because it brought in business. Most people would go ahead and buy their gas, cigs, beer, and snacks when they cashed their check.
Now I live in a part of the country where convenience store employees are not allowed to be armed and can't cash a $100 bill even if you spend $50 of it. I guess that's progress...and another subject altogether. - KSUdesigner, on 03/19/2009, -0/+27Most banks won't deny you an account simply because your credit is bad. What they will deny you for is if you've previously overdrawn too many times at another bank and they closed your account. Once that happens you are entered into ChexSystems, which is a national database basically telling all banks that you aren't trustworthy, and you won't be able to open an account anywhere. Takes 7 years to get out of ChexSystems.
- brulec, on 03/20/2009, -5/+28mexicans
- inactive, on 03/20/2009, -0/+17If you live in a large city, especially one with a bad split between rich/poor areas, drive around one day and play the bank/check cashing game. In the poor part of town, try to find a bank. There will be 2-3 per square mile if you can find any at all, whereas there's a check cashing place every 2 blocks at least. Then go to the rich end of town... there's a bank on every block, sometimes more than one bank. Just endless banks... once you start looking for them, it's rather bizarre how common they are.
It's not a black/white thing either. There's a lower middle class, but mostly white, part of my city and it's just as hard to find banks there. Bookstores too. Danged free market is kind of cruel at times...
There's a check cashing place near where I always eat lunch which, I swear, has had a "grand opening" banner up since 2003. Those places are weird. - edstate, on 03/19/2009, -2/+18There's also myriad other costs to run a business in a "bad" neighborhood.
- edcrosay, on 03/20/2009, -0/+16That's *****. Way to get with the times.
- gfox, on 03/20/2009, -2/+18Sometimes I get money in a check and I need to cash it after the bank is closed. Wal-Mart is open late.
- oboshoe, on 03/20/2009, -2/+17There's a bit of a conundrum in that though
Banks can't make money banking in bad neighborhoods, yet
Check cashing company CAN make money banking in bad neighborhoods.
Check cashing is after all, just an aspect of banking.
The reason of course is the fees. CCC's charge outrageous fees while regular banks do not.
Which begs the question. Why do residents give business to those who overcharge, while letting traditional banks that charge normal fees whither?
Education I guess. - Nattybumpoe, on 03/19/2009, -2/+16There's a lot of reasons why people choose check cashing services (not to be confused with payday lenders).
It's clever marketing for one.
Secondly, a lot of the people that lived in these areas experienced bank closures (since they weren't high earning areas).
Thirdly, low income individuals typically don't trust banks.
Fourth, the check cashing services unbundle services for individuals that normally require an account to do.
Fifth, the check cashers try to be a one stop shop for meeting the needs of their clientelle. - robbiedo, on 03/20/2009, -0/+14There are myriad of reasons why some people need a check cashing service. Some are enumerated above. However, one reason people need these services is because they are trying to avoid even more money taken from their checks. Tax avoidance, liens, child support arrears, etc.
Consequently, it can be quite rational to use one of these services. - futurepastnow, on 03/20/2009, -6/+19Believe me, more people do not have bank accounts than do. I don't understand it, either. Most people are morons.
- carlosos, on 03/20/2009, -0/+13How do they know that it a cell phone number? I always put my cell phone number under home or main number.
- NegativeDigg, on 03/19/2009, -7/+20Let me give you an idea, how about when you need money and the bank takes 3-4 days to post it on your account or it's on a sunday. Banks also charge to cash checks so i don't see what the point of this article is. Illegal immigrants? They can open accounts with a ITIN number. There are a lot of reasons people need money fast but this guy just writes an article to make himself feel better i guess..
- Chompy, on 03/20/2009, -1/+14While crime rates are a factor, the real reason you don't see many banks in poorer areas is that many poor folks do not trust banks, and therefore they refuse to patronize them. Here in the Southwest, many folks also have an additional disincentive; you need a SSN to establish an account.
- SexyandSassy, on 03/20/2009, -3/+15I was lucky enough to have went with my brother to get his check cashed at one of these classy establishments a couple months ago b/c his bank had already closed for the evening. No joke we pull up to a "drive thru window" and while he proceeded to pay $17 (wtf!) to get his check cashed a young gentleman approached the car and began beating on the side of my window and asked me if would like to give him $7 for a cd he had (his own multi platinum pile of ***** on a disc?) I however declined politely and we got the HELL outta there ...not insinuating these places are ghetto as hell or anything but yea they are
- StateTheObvious, on 03/18/2009, -13/+24Because most banks do credit checks and won't give you an account if you have bad credit. Especially if it's a 'free' account.
And let's face it...add in all the fees and whatnot that the bank charges, it is sometimes cheaper to 'pay' a check cashing service than it is to 'pay' the bank fees. And as a bonus, it's only a one time charge, whereas a bank hits you with fees every month whether you have used the account or not. - mattearle, on 03/20/2009, -0/+11Don't be fooled. This guy wrote this article because weeks after we are done discussing this, his blog will rank #1 in Google for "check cashing service" and he will make lots of money.
- Asheis, on 03/20/2009, -2/+13this article is stupid. I don't know why it's even on the front page.
- inactive, on 03/20/2009, -0/+11"Most people are morons."
You know it's true... - bradspangler, on 03/18/2009, -0/+11The point is, stuff costs because there are costs involved in providing it. A different region might have a different culture and demographics and thus higher costs -- including higher incidences of theft, employee theft, insurance costs, armed courier costs, bad checks, increased front counter labor costs in areas with high demand for the service and so on. Some places, those costs mightbe low enough to justify absorbing them as a customer service expense, but not in other places.
- topgigmedia, on 03/20/2009, -1/+11Check cashing places also offer payday loans (an advance on next week's checks). Getting a loan from an actually bank requires much more paperwork and of course good credit, etc.
These check cashing places serve the lower economic bracket which is why they are typically in less affluent places. - unknownpoltroon, on 03/20/2009, -0/+10Use my number!!
(123) 456-7890
I dont mind taking a message for you. - inactive, on 03/20/2009, -0/+10What the liquor stores on every corner isnt working
- LucasKane, on 03/20/2009, -1/+10The Mooninites
- hawksfan03, on 03/20/2009, -0/+9i had to open a membership at a movie rental store and they wouldn't let me open an account without two phone numbers. I told them I only had one and they said I needed two. I gave them my brothers number but do they think if I'm trying to skimp on my bill and not answer my primary line i'm going to answer my secondary line?
- ogletree, on 03/20/2009, -1/+10To open a bank account you have to have money. When you open an account you give them a check and they sit on it for quite a while. A lot of people can't afford to save money like that. They get paid they need every dime immediately. They never get to the point where they can give somebody $50 that they can't use for a week. Some people are paranoid and don't trust banks. Some people are go where the work is and that means they can't have a home bank. Also some people don't have an address and some don't have social security numbers.
Also if I have a check for $500 my bank will only give me $100 of that check until it clears. If I need $500 right now I need to cash that check. I'm smart enough to go to the issuing bank and cash it but most people are not. - moothemagiccow, on 03/20/2009, -0/+8People who are dumb with money get a bank acct, put $100 in and manage to write a check for $200. When they get $50 overdraft fees they can't pay, they "don't trust banks," but who they shouldn't trust is themselves.
- bradspangler, on 03/18/2009, -6/+14Let's attempt to clarify by assuming you mean "Why do check cashing services THAT CHARGE MONEY exist".
I could explain why, but perhaps the point would be better demonstrated through experience. Go try to offer check cashing as a free service and see how well that works out. - MrFoof82, on 03/20/2009, -2/+10That's pretty much it.
There is a good chunk of the population that truly lives hand to mouth. 90% of their income goes to fixed expenses or semi-variable fixed expenses (i.e. food, which is the most likely one to eat up anything left). There's not much to save. So what do they do when the only bank branch around charges a monthly fee to maintain an account when your average daily balance is below $25,000?
Right. They don't bother.
The other reason is if you're spending nearly all of your income, you're obviously not saving much, so those account minimum fees hurt you. But moreover, there isn't much of a safety net in the event "***** happens". Need $800 for an emergency? Yeah, I know, balancing a register isn't hard, but some people don't bother. Banks don't bounce checks nowadays, they just overdraw you. With a nice fee. And other fees being tacked on periodically while you still have a negative balance. Plus the minimum account balance fees. Plus any other regular fees. People who've experienced this are the types that don't "trust banks".
Not something I've ever had to worry about, but there's a good chunk of the population that does. - RAT-Man, on 03/20/2009, -3/+11They take advantage of poor people.
It's the American way, sadly. - oboshoe, on 03/20/2009, -1/+9You really thing that corporate fat cats AREN'T running check cashing places?
Understand this.
The unscrupulous do not clear what color your skin is. They only care how much they can take from you. - oboshoe, on 03/20/2009, -0/+8I'm rather old, but I can count on one hand how many times I've been given a check on Sunday.
I've -never- gotten a payroll check on a Sunday, nor received any check in the mail on Sunday. - o76923, on 03/20/2009, -0/+8but if you run out of food, you can't just not eat for three days for a check to clear.
- derge, on 03/20/2009, -2/+10This article is terrible. It reads like it was written by a rich kid.
He may as well have said, "...poor people are so stupid. Why don't they just use their AMEX instead of cash and have their checks directly deposited?" - kd1s, on 03/20/2009, -1/+8The sad part is Check 21 was supposed to solve that. People don't realize, when you give a merchant a check they can scan it and submit it for payment via ACH transfer. It's immediate.
Yet banks, they hold it for anywhere from a day to 7 days depending on what geographic area the check came from.
You can't tell me the banks don't have the technology that merchants have.
They just get to play with the float. Under fractional reserve they make a bundle. Lets say you deposit $1,000. Of that $1,000 they only have to keep $100, the other $900 can be loaned out. It's really a fascinating fiction. - real, on 03/20/2009, -2/+9Some people dont have checking accounts, or Savings for that matter
- flibblesan, on 03/20/2009, -3/+10Glad it's not like that in the UK. Here banks are told by government that they must offer a basic bank account to all - no matter credit history.
- roosterx, on 03/20/2009, -0/+7Don't kid yourself or anyone else here. Plenty of white people use these services also.
- koob, on 03/20/2009, -0/+7Well if I was an owner of a business I would want people to cash their checks at my business because then maybe they'll spend their cash at my business rather than going elsewhere. Wal Mart wouldn't be doing it if it wasn't profitable in some way or another.
- thegrantman, on 03/20/2009, -1/+8Banks have taken up the practice too.
Bank Of America charges $6 to cash a check (any amount). - ravage86, on 03/20/2009, -0/+7If they need every dime immediately, why do they give 10% to a check cashing place?
- olenick, on 03/20/2009, -0/+6I work in one of those in-between neighborhoods but there's a great deli that also has a busy check cashing business so get to see it lots. They seem to have a lot more check cashing going on than food sales (I figure somebody's probably subsidizing my mysteriously inexpensive but delicious subs but that's a different issue).
Most of the people lining up for check cashing are minorities but most seem to be Americans; no accents. Most seem to be black people. There are banks just a few blocks in each direction; easy walking distance -- I have no idea why they cash checks there. I asked the owner and, despite having more cash than most banks, he didn't completely know either; his guess was garnishment orders on regular bank accounts, distrust of banks, or just wanting to stay off the financial grid.
They spend a lot of time on the checks, scanning them, calling different numbers to verify them -- it's all kinda' annoying when you're waiting in line to get a sandwich -- but doesn't seem like it'd be any more private or convenient than a bank; seems like way more of a PIA. - crpndeth, on 03/20/2009, -5/+11Not true. My sister was rejected at Bank of America purely based on her credit.
- Cattywampus, on 03/20/2009, -0/+6Many people may not have the assets or good credit history (or any credit history) to open a bank account. Or if they *can* get a bank account, they get nickel and dimed with per-check charges and monthly fees (which can make the account more expensive than a check-cashing service).
The more money you can put and keep in your account, the more benefits and fewer fees you'll have. If you just have the cash to open a no-frills account, you'll pay more fees. If you don't cash many checks per month, a check-cashing service can actually be cheaper. - inactive, on 03/20/2009, -2/+8It actually hurts your credit score (though by almost nothing) to not have a land line. They figure that owning only a cell phone is a sign of instability.
I havent had a land line for 6 years now. Who needs em when cell phones are so cheap? -
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