How Do Cheque Cashing Services Work?
Money Problems, No Bank Account or is Cheque Clearance too Slow?
Mar 24, 2009
Whilst most employers pay employees with an automated BACS payment, there are still a number of smaller businesses that pay by cheque. Cheque clearance takes 4-5 days, which can create short term cash flow or money problems for many people.
Why Use a Cheque Cashing Service?
Receiving payment by cheque can present problems for the millions of people with a bad credit rating and no bank account to pay it into. Others can't afford to wait 4-5 days for cheque clearance as they need to pay their mortgage, rent or a utility bill as a matter of urgency. For a 5-10% fee, cheque cashing services help those with money problems to secure an immediate cash advance.
The Cheque Cashing Process
- Name of the cheque. All third party cheques must be made out to the person requiring the advance.
- Age requirements. The cheque cashing service is available to over 18s, although Cash Converters will sometimes accept third party cheques from 16-18 year olds.
- Identification. In order to prevent cheque fraud, three sources of identification are generally required. This includes one source of address proof, such as a bank statement or utility bill and one source of signature proof, such as a passport or driving license. Some cheque cashing services, such as Cash Converters, require a passport photo for their records and to minimise paperwork should the service be required again in the future.
- Cash advance. All cheque cashing services charge a fee, but most will provide a cash advance of 90% of the cheques value on the day.
Types of Cheque Accepted
- Wages
- Giro
- Inland Revenue
- Insurance
- Building Society
- Personal Cheques
- Account payee and non-negotiable
The more official the source of the cheque, the more likely it will to be cashed on the day.
British Cheque Cashers Association (BCCA) Membership
Try to identify cheque cashing services that are regulated by the British Cheque Cashers Association (BCCA). Chequeinterchange.co.uk is a family-run business that has been in existence since 1930 and is regulated by the BCCA.
Consumers that have been paid by cheque and cannot afford to wait 4-5 days for cheque clearance may wish to utilise the services of a cheque cashing service, such as Cash Converters. Following the provision of suitable ID to prevent cheque fraud, it is possible to cash a cheque and get a cash advance of up to 90% of the cheques value.
Those struggling with money problems and personal debt may be interested in finding out whether they have an illegal credit card or unenforceable loan agreement. Individuals that are struggling with serious debt problems may be able to write-off debt with an Individual Voluntary Arrangement.
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