Banks versus check cashing
As Dan Thanh pointed out earlier, banks don't have too many fans these days.
Take a look at the Internets Celebrities' amusing video about why people in poor neighborhoods use check-cashing services. (Thanks to Maryann over at Baltamour for the heads up on this one.)
There are so few banks in poor neighborhoods that it makes sense to use one of the check-cashing centers conveniently located in their communities. And banks are not open when you're available, after business hours.
Then again, banks earn a lot of money charging their customers for penalties and services as well, especially if you don't carry a large balance. Consumerist.com tallied a local check casher's fees and found them to be 1 to 4 percent per transaction.
Fees for low balances can really eat away at savings when you live your life paycheck-to-paycheck and don't have a cushion to protect yourself from unexpected expenses.
Obviously for-profit banks need to act in the interests of their shareholders, and lower-income banking clients can be a greater risk. But one could argue that they could still make money charging lower fees to a larger --- poorer --- group of people.
At least with check-cashers you know up front how much you're going to sacrifice from your hard-earned pay.
(ed note: Good point Liz. I know check cashers aren't great, but you know that old saying, "The devil you know..." Pay a one-time fee now or get whacked unexpectedly by a bank fee, which is taken directly out of your account, which could throw all your other bill payments off, which would then get you whacked with other fees for insufficient funds and bounced checks. Not sure if that's better. Banks just have more of a whiff of legitimacy to how they rake you over the coals. -- DD)
