Are debit cards part of your payroll options?

[DainBramaged]

Paid via Card, Workers Feel Sting of Fees


A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers. Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card

http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html

8 votes, 0 passes | Time left: Unlimited
	Yes
	0 (0%)
	No
	6 (75%)
	Kitteh
	2 (25%)
	0 DU members did not wish to select any of the options provided.
Show usernames Disclaimer: This is an Internet poll

[Travis_0004]

1. We have one option: Direct deposit.

[etherealtruth]

7. Yep

I don't know if paper checks are an option ... but, I do know "everyone" uses direct deposit

[Safetykitten]

12. Idiotic responses like this show the level of understanding of people making shit for wages...

Beyond the people here.

Well, so Bill the 9 buck an hour guy starts work at the local life sucking retail/food conglomerate. They say, "Direct deposit OR card". Bill being the upstanding person he is, as he pays everything by money order because he can barely make his bills, goes down the the local Obama saved TBF bank and he is presented with, "no, your credit sucks".

So get how it works now?

People on the edge live barely paycheck to paycheck. Many have credit issues. Many cannot even afford the fees associated with a TBF bank. The TBF bank s preys on people like this as any deviation in amount in the account is banged hard. People that keep their account barely open to have a paycheck are like caviar to TBF banks.

[hack89]

13. They do not run credit checks for checking accounts

they will run a bank history check on you. That is to determine if you have a history of bouncing checks.

Banks and credit unions want to learn about your financial past before establishing an account with you, and they do this by running a bank history report on you, says Kimberly Allen, a certified credit counselor in Williamsburg, Va. This report is different from a credit check, she says.

"The bank history is an indicator of how the client will handle bank accounts in the future," Allen says.

If the report shows that a potential client has a record of mismanaging his or her past checking privileges, the new financial institution will take it into consideration and could refuse to open a new account, she says.

Gregory Meyer, a spokesman for Meriwest Credit Union in San Jose, Calif., says banks check to see if a past account was "closed for cause," meaning the bank or credit union shut down the checking account because of an account problem. Here's how they work.

Read more: http://www.bankrate.com/finance/checking/denied-checking-account.aspx#ixzz2XoEwCE6K

[Safetykitten]

14. And? Your point?

[hack89]

17. "no, your credit sucks"

your credit is irrelevant to getting a checking account.

[ieoeja]

16. Our only option at work is also direct deposit.

My employer only gives us that one option. I realize this is an idiotic response on my part. But it happens to be true.

What I don't understand is why my response and that of the other poster are idiotic. Could you please explain why it was idiotic of us to answer the question?

[FreeJoe]

20. Help me to understand

What are you suggesting? It seems that direct deposit would be the best option for anyone with a bank account. For those without, but debit cards and checks (which need to be cashed) have fees associated with them for anyone without a bank account. I would imagine that employers would want to avoid paying in cash for many reasons - security and auditability be the two most obvious.

It certainly seems like there is room for better regulations on the fees charged by these debit card issuers, but I can't say that I know anything about what they charge and what it costs for them to provide the service.

[Ruby the Liberal]

30. A bank I once worked for just raised their rates

If your incoming direct deposit isn't $2,500 per month - they are now charging $15 a month for the privilege of having a checking account with them. My jaw hit the floor. This is a local, regional bank in their area - not a TBTF. That account used to be direct deposit, no account minimum, no minimum direct deposit amount requirement to waive fees.

[Earth_First]

22. How, exactly did you derive that response from a single, direct response to the OP?

Just out of curiosity...

[Iggo]

25. "Idiotic responses like this."

Which response were you referring to?

The question was: Are debit cards part of your payroll options?

And his answer was an only very slightly roundabout version of: No.

How is that "idiotic"?

[Ruby the Liberal]

31. Sk, cheksystems looks for outstanding bank issues

bounced checks, kiting, check fraud, etc...

It has nothing to do with overall credit - it only speaks to past banking history.

[Travis_0004]

33. How is that an idiotic response?

A question was asked, and I answered it. My job has one option, direct depost. Maybe you can argue there should be more options, but that was not a point I tried to make. I simply said my job offers one option.

[richmwill]

2. If you use it at a store, ask for cash back at the register. No fee with that. (n/t)

[sweetloukillbot]

4. I think they charge a transaction fee if you use it at stores as well.

There is nothing good about debit card pay. When I was delivering pizzas the two choices were direct dep. or debit card. Everyone used direct deposit and the staff was explicitly told by the manager not to do the debit card if they could avoid it, even recommended a credit union that was easy to open an account at.

[DainBramaged]

11. They call it "convenience", I call it bullshit

http://www.adp.com/mypaycheck/payroll_debit_cards.pdf

[diabeticman]

3. They need to pass a law stooping this. One should demand to know what type

of kickback employers are getting by forcing these type of card on Employees. Employees are losing more money for no reason other than bankers getting richer.

I hope Senators Sanders or Warren or even Rep Grayson sees this story and does something about it.

[Initech]

24. I agree, it's complete bullshit.

I live paycheck to paycheck, it's already horrifying enough as it is. We are the people who get nickel and dined to death enough as it is. The last thing we need is this bullshit from vulture banks.

[Agschmid]

5. It is an option at my workplace...

We also still have the more traditional options of physical check and direct deposit.

I agree that the fees associated with this should be fought and are unfair.

[FrodosPet]

26. I get paper checks. No direct deposit option

So my choices are burn $16 a month in gas to get my check in person, or wait 2 to 3 days after payday for the mail and hope the mail is not late so I don't have to pay a $40 late rent fee.

I miss direct deposit. The debit card thing, OTOH, sounds ridiculous.

The person in the article seems like they may have the same bad habit as my former roommate. She would get small amounts from a gas station ATM several times a month and get slammed with fees. I tried to explain, take out all the cash you need at once.

[sweetloukillbot]

28. My wife has no direct deposit at her office

She gets weekly paychecks and it is often too late to get deposited on Friday for access on Saturday - often won't post till Tuesday. We have to use a cellphone deposit that costs 50c per deposit, but we always have next day access if we need it for bills. $26 per year isn't too overbearing for the convenience of using the deposit app.

[penultimate]

6. I don't think I've ever had that option, let alone been forced to use it.

However, my brother was paid in that method. I don't know if it was his only option, but he took it because he couldn't open any bank accounts anymore due to his irresponsible behavior (in most cases it was his fault and not just asshole banks being assholes)

The fees are unfair if it's the only option they have to be paid. If they have other options, then whatever, because they can choose a regular check or direct deposit. It really gets me that they don't allow other options though. So someone who has a normal checking account has to go through extra steps to put their money into their real account. Which even if they get that one free withdrawal, they are still losing time to have to do it. Plus most banks give free checking if you have direct deposit. That's a fee they wouldn't have to pay if they were not being forced to use the card.

That being said, I don't think the cards themselves are inherently bad if someone chooses to use them. Like I have a netspend account that has similar charges, but I only use it to buy stuff online.

[Benton D Struckcheon]

8. Well, in the old days if you didn't have a checking account,

you'd have to go to a check cashing place and pay a fee to them. It looks like debit cards are the newfangled version. And then there's payday lending....

[SheilaT]

9. I worked for several months for Zales Jewelry

a few years back. My first paycheck or two was a debit card, until they got the direct deposit thing going. I do not recall having serious fees with it, but it was annoying not to have the actual cash.

[Recursion]

10. Pretty sure that was an option when I signed up for direct deposit

A lot of the hourly employees can't get bank accounts because banks hate to deal with poor people, so that's what they're stuck with. It sucks, though it's still better than what they would pay taking a physical paycheck to a check cashing place.

[leftstreet]

18. Do you assume all 'hourly employees' are 'poor?'

Just curious because this seems to be a new thinking trend

[Recursion]

19. No; I was an hourly employee and not poor. That's why I said "a lot"

However, a lot of the hourly employees were, in fact, poor. Which is why I said "a lot of the hourly employees". Plus the fact that some of my friends on the grounds crew complained about not being able to get a bank account, and I suggested a bank I knew that would take an account from anybody (Suntrust).

[tammywammy]

15. Direct Deposit or paper check by mail.

I think it's probably a small minority that actually gets a paper check.

[JaneyVee]

21. Same here except, direct deposit or paper check issued on pay day.

[Myrina]

23. I've heard of temp/contractor agencies who use them as well.

As if they're not screwing workers enough by not offering bene's/PTO etc etc ...

[House of Roberts]

27. Never give me the option to vote kitteh!

It is against my religion to not vote pro-kitteh!

[KamaAina]

29. Not just no but HELL NO!

By the way, the practice is illegal in many states.

http://www.pennlive.com/midstate/index.ssf/2013/06/mcdonalds_debit_card-lawsuit.html

"I'm looking for the pay I am owed and for them to understand there has to be an option," Gunshannon, 27, told the Citizens' Voice.

Gunshannon was hired April 24 at the McDonald's in Shavertown and worked for a month before quitting. She was given her first paycheck and, along with it, the debit card. She said she did not sign the debit card or enroll in the payroll system because she believed the fees would reduce her future earnings to below minimum wage.

According to the lawsuit, the J.P. Morgan Chase payroll card carries fees for numerous transactions. They include a $1.50 minimum charge for an ATM withdrawal, $5 for an over-the-counter cash withdrawal, $1 to check the balance, 75 cents per online bill payment and $15 to replace a lost or stolen card.

State law entitles employees to choose to be paid by options including check or cash, said the lawyer, Mike Cefalo.

[Starry Messenger]

32. I guess I'm a dinosaur.

I like getting my check by mail and having it in my hot little hands. A co-worker of mine got burned by direct deposit (years ago, admittedly) when her check didn't go through while she was on vacation in Europe and had to find her money from overseas.