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Alternatives to Check-Cashing Outlets

Avoid Check-Cashing Outlets
Check-cashing outlets charge very high fees to cash government, personal, and pay checks. Don’t use them!

Use a Bank or Credit Union
You should always use a bank or credit union to cash your checks. Advantages include:

• free or low-fee check cashing
• safety, since cash can be deposited safely in a bank instead of having to leave the store carrying cash
• ability to write checks
• easier to do household budgeting

Get the Most Out of Your Bank or Credit Union
Here are some tips to help you use your bank account instead of relying on highfee check-cashing outlets:

• Use direct deposit into a bank account.
• Find a bank close to your work/home that is open a bit later than usual.
• Prepare a budget to help plan for expenses.

Thinking of a Payday Loan?

What is a Payday Loan?
A payday loan is a small, unsecured, high interest, short-term cash loan. In most cases, consumers write a post-dated, personal check for the advance amount, plus a fee. The lender holds the check for the loan period and then deposits it, or the customer returns with cash to reclaim the check.

You Should Know!
Although a payday loan may be a convenient short-term solution, it is inappropriate for long-term cash needs. Borrowers can get trapped in a payday loan cycle of debt by taking out loan after loan sometimes called “rolling over” the loan.

Think a Payday Loan is the Answer?

Consider Your Options!

• Ask about delaying or making payment arrangements on your non-interest bills like telephone and utility bills.
• Ask to borrow money from a friend or family member.
• Ask your employer for an advance on your paycheck.

What to Expect in Washington State:

• Maximum Loan Term: ……………………………………………….45 days
• Maximum Loan Amount: ……………………………………………..$700
• Maximum Fee:…………..15% on the first $500 -10% above $500

For Example:
A loan for $500 + $75 fee = $575
A loan for $700 + $95 fee = $795
Under the Truth in Lending Act, the cost of credit must be disclosed. Among other information, you must receive information outlining the finance charge and the annual percentage rate (APR). The APR informs you of the cost of your loan. For example, a 14-day, $500 payday loan with the maximum fee permitted by statute would have an APR of 391.07%.

If You Decide to Get a Payday Loan, Shop Wisely!

• Contact the Department of Financial Institutions to verify that you are dealing with a licensed lender.
• Comparison shop for the lowest fees and penalties. For example, some credit unions offer payday loans with lower fees.
• Borrow only as much as you can afford to repay with your next paycheck.
• Know when your payment is due and be sure to repay the loan on time and in full.
• Avoid borrowing from more than one lender at a time.
• Plan for the future by making a realistic budget to help avoid the need to borrow for emergencies and unforeseen expenses.

Know Your Rights and the Law!

• You have the right to change your mind about the loan within one day.
• You have the right to know all of the costs involved.
• You have the right to a payment plan.
• A payday lender may not threaten criminal prosecution as a method of collecting a past due loan.
• Paying off an old loan with a new loan may be illegal.

Washington State Department of Financial Institutions
The Department of Financial Institutions regulates a variety of Washington State financial service providers such as banks, credit unions, mortgage brokers, money transmitters, payday lenders, and securities broker-dealers and investment advisers. The Agency also works to protect consumers from becoming victims of financial fraud. To file a complaint or get answers to your questions, contact DFI at 1-877-RING-DFI or visit our web site at www.dfi.wa.gov.

WHAT DO YOU NEED FROM A BANK?
When deciding on a checking account, remember that financial institutions offer different types of checking accounts. To determine what you need, think about how you plan to use your checking account. The following questions will help you determine what you need in a checking account.

Convenience

• How many checks do you think you will write every month?
• Do you want a bank that is close to your home or work?
• What are the bank’s hours of operation?
• Will you use the ATM often?
• Does the bank have ATMs close to where you live or work?
• How often do you plan to visit the bank to use teller services?
• What other bank services are important to you?

Cost

• How much money will you keep in your account?
• Will you be charged for writing extra checks?
• Are you willing to pay a monthly fee?
• If so, how much?
• Will you be charged to use your bank’s ATM?
• Will you be charged for using other banks’ ATMs?
• Will you be charged for using teller services?
• Are there ways to avoid paying fees?

ADDITIONAL BANKING SERVICES
For each description, fill in the name of the services that best fits the description.

Banking Services
Direct Deposit, Money transfer, Money order, Debit card, Telephone banking, Stored value card, Online banking, Loan, Automated Teller Machine (ATM).

Parts of a Check

1. Your name, address and phone number.
2. The number of the individual check.
3. Your bank’s name
4. Your bank’s routing number.
5. Your account number
6. The number of the individual check.

Check Writing
How To Write a Check
Important Tip: Use a non-erasable, ballpoint pen. Fill in the following parts of the check:

• The date
• The name of the person or company you are paying.
• The amount in numbers
• The number spelled out in words (keep the words close together).
• Draw a line from the last word written to the word “Dollars.”
• A note about what you wrote the check for
• Your signature

Practice Writing Checks
Here are a few sample bills you can pay using the sample checks provided to you.

• You owe AllBright Electricity $80.56 for the June electricity bill.
• You owe your babysitter, Sandra Chen, $150.12 for babysitting in April.

For more reading, just download this pdf free ebook here.

Source : www.hope-link.org

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