a thoughtful web.
Good ideas and conversation. No ads, no tracking.   Login or Take a Tour!
comment by steve
steve  ·  3037 days ago  ·  link  ·    ·  parent  ·  post: How poor people stay poor

Blergh. This topic is very timely, and very salient exactly right now. Guess where I am:

That's right.

The Walmart money center with a dozen people in front of me and even more behind me.

You know what else poor people don't have? Access to easy money systems. It's crazy. I've been in this line 20 minutes already and expect at least 10 more. Time is a luxury I have. Most working poor don't.

I don't mind taking this time for a friend in a pinch. But holy crap - if your world depends on this solution for cashing a check or paying a bill???

Access.





user-inactivated  ·  3036 days ago  ·  link  ·  
user-inactivated  ·  3037 days ago  ·  link  ·  

You forgot to mention that they charge an arm and a leg to cash your check for you. I don't know what the going rates are these days, but I remember it wasn't unheard of to be charged $20 to cash a $250 check.

Banks with free checking are a double edge sword. On the one hand, suddenly you can start cashing/depositing your checks without being charged crazy fees. On the other hand, if you fall below your minimum required balance, you start haemorrhaging your hard saved money due to bank fees.

user-inactivated  ·  3036 days ago  ·  link  ·  

and the less said about payday loan the better.

user-inactivated  ·  3036 days ago  ·  link  ·  
steve  ·  3036 days ago  ·  link  ·  

According to the signage, it's $3 to cash a check. It cost me $9 to send $150 cash.

I have the luxury of saying "ok good. It's only $9"

To a poor person, $9 might keep the power company from shutting off the lights for a day or two. It will get you to work and back a couple times on the bus. It would feed a large family a humble meal.

$3 is almost a round trip bus ticket.

user-inactivated  ·  3036 days ago  ·  link  ·  

Shoot. That's not too bad at all. That's actually pretty reasonable. I'm looking online now for average rates and the going rate seems to be anywhere from 1-3% of the check's face value. That makes me wonder if I'm remembering things being worse than they are or if there were laws introduced to crack down on predatory fees.

Edit: Looks like it's a bit of both worlds.

    Check-cashing centers typically charge a fee based on a percentage of the check being presented and these fees often range from 1 percent to 20 percent. In the state of Ohio, laws prevent check-cashing services from charging a check-cashing fee that amounts to more than 3 percent of the check amount. State law does not prevent centers from charging additional fees to convert proceeds from a cashed check into another form of payment such as a money order.
steve  ·  3036 days ago  ·  link  ·  

I think this is one of the times when Walmart bottomed out prices - and I don't hate them for it

wasoxygen  ·  3033 days ago  ·  link  ·  

This makes me curious -- which time when Walmart bottomed out prices did you hate them for it? Was it the inexpensive clothing? The affordable household goods? Or perhaps that time Walmart rocked the industry by introducing $4 prescription drugs?

(Where allowed by law. In some states, it is illegal to sell medicine too cheaply.)

tehstone  ·  3033 days ago  ·  link  ·  

The people previously providing clothing and household goods in many towns were likely mom & pop type stores. Walmart tends to put those kind of shops out of business.

The only folks profiting off of high check cashing fees are banks and check cashing/payday loan stores that are as bad or worse than Walmart.

wasoxygen  ·  3032 days ago  ·  link  ·  

    The people previously providing clothing and household goods in many towns were likely mom & pop type stores.

That is possible, or the goods may have been provided by mail order, or more distant retail outlets, or people may have made their own goods or gotten by without them.

When the alternate retailers were less efficient than Walmart, and unable to provide as good a value as Walmart, customers naturally chose to bring them less business. Bad news for mom, pop, and Sears, good news for all the price-sensitive shoppers that are the subject of this conversation.

Creativity  ·  3036 days ago  ·  link  ·  

Wait, let me understand this correctly : you have to PAY MONEY for DEPOSITING A CHECK ?

That's seriously fucked up.

I never thought about it, in France you just go to your bank, you fill a piece of paper indicating the amount, the bank account and some additional information in addition to the check and you put it in a mailbox type of thing and the next day it's cashed in and available.

user-inactivated  ·  3036 days ago  ·  link  ·  

No. Most banks have free checking, but you have to maintain what's known as a "Minimum Balance." Basically you have to have anywhere from $200-$500 in your checking account at all times. If you have under that amount, the bank starts charging you fees for not having enough money in your account. I'm talking fees like $25-$50 every few days, if not daily. Your account can quickly and easily go into the negatives if you're not careful. What happens then is the bank closes your account, you owe them money, and you have a black mark on your record making it that much more difficult to open a checking account at another bank down the road.

A lot of people who live on the financial edge can't afford that minimal balance or the risk that comes with having a checking account. So they don't have one. Instead, they go to places like Wal-Mart, their local grocery store, or ironically, their bank to just have their check cashed right out. They have to pay a processing fee to do so. The fee usually starts out at about $5 dollars or so but quickly goes up. The larger your check is, the more you have to pay to cash it.

Edit: As I posted in another comment, the fee can vary.

qiy  ·  3034 days ago  ·  link  ·  

Most credit unions I have been in do not have a minimum for basic checking. You yuo want some perks then you may end up losing money due to minimum balances, but they don't apply this to poor members because you specifically need a large amount of cash in the accounts to make the switch.

The illegality of credit unions (non profit money institutions or approximately banks) is equivalent to a regressive tax in the amount that the big banka in the US earn from these petty fees. Why would you not want a non profit bank? That case is so clear that it is only the entrenched interests of the super rich that have prevented it.

Note: they are not illegal, but you can't just make a general credit Union for everyone and compete with banks. Why? Well you would certainly kick the banks to the curb, which is exactly what their powerful leaders don't want.

user-inactivated  ·  3036 days ago  ·  link  ·  

https://www.acecashexpress.com/

Don't get me started on these fucking vultures.