I came across this interesting post on creditcards.com that details several steps an individual should take to reduce unemployment prepaid card fees. With more than 6 million unemployment insurance recipients in the U.S., I thought that this was important information for our readers. Here are the steps detailed by LaRita Heet:
1. Just because it looks like a debit card ... doesn't mean it is a debit card, even though the terms "debit card" and "prepaid card" are sometimes used interchangeably, according to Jennifer Tramontana, director of communications for NBPCA. "Unemployment benefits cards are prepaid cards that are issued by a bank. They look just like a debit card or credit card, but they are a network branded prepaid card," she says. Prepaid card accounts differ from a debit cards in that debit card funds are typically withdrawn against money in your checking account. Prepaid cards are preloaded with a set amount of cash and generally have numerous fees and restrictions.
2. Read the instructions. You should never skip the fine print, but this is particularly true of your unemployment prepaid card literature. "When consumers take a few minutes to read the welcome kit that comes with the card, they can virtually eliminate all surcharges and can immediately take advantage of the numerous benefits that come with these cards, including immediate availability of funds, fraud and loss prevention and cost-savings," says Trusko.
3. Follow the rules. Most UI card issuers allow a set number of free ATM withdrawals per pay period (usually one or two). Plan ahead to withdraw enough money to last so you don't get stuck with withdrawal fees later in the week.
4. Take advantage of free services. Some states, including Maryland and Kansas, and their issuing banks offer free online account management and free phone transfers. However, don't assume anything is free -- check the literature to be certain.
5. Look before you leap. Consider choosing the "direct deposit" unemployment payment option over the UI prepaid card -- and have your money immediately deposited into your regular bank account, where available.
6. Withdraw the money and deposit it into your bank account. Depositing unemployment funds into your regular account means avoiding unnecessary fees and having to keep track of your finances, says Kelly Phillips. "The only disadvantage to this is that U.S. Bank is not my bank, so in order to avoid the fee, I have to go there first, and then go take the cash to my bank -- and the reason that we do that is because you don't get a statement," she says. Because most UI accounts, including those at U.S. Bank, do not offer account statements or free online banking, budgeting can become a nightmare.
7. Stick to what you know. Phillips adds that some UI recipients do not have their own personal bank accounts and are accustomed to using cash for everything. "If you just normally lead a cash life, then continue to do it that way, especially if you're not used to having a prepaid card," she says.
8. Set up an automatic transfer. "I would suggest setting up an auto-transfer so that any time money lands on the card, it is automatically transferred to a banking account of your choice. Then, in essence, it's just like direct deposit," says Lisa K.
Take a look at the full post here.
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