Prepaid Cards for Jobless Benefits

by. Konrad Christensen

In an effort to save money and be more efficient, 42 states in the U.S. now direct deposit monthly unemployment benefits to out-of-work consumers on reloadable prepaid cards, rather than mailing paper checks as they have done in the past. In fact in the 2013 Survey of Unemployment Compensation on Prepaid Cards, the National Consumer Law Center (NCLC) rated prepaid cards from 18 states with a “thumbs up” designation for eliminating overdraft fees, reducing point-of-service fees and making ATM fees easier to avoid.

The perception of high usage and recurring monthly fees continues to plague prepaid cards. Yet there are many advantages for both states and consumers to providing monthly unemployment disbursements via this convenient and safe method. For example, for state agencies the advantages prepaid cards offer are the ability to:

  • Accommodate recurring and exception payments
  • Transfer any value, at any time
  • Distribute funds more efficiently to transient populations
  • Distribute multiple benefit sources with a single card

For out-of-work consumers, the major conveniences of prepaid cards are:

  • Immediate availability of funds
  • No waiting at distribution outlets
  • No check-cashing fees
  • Access multiple benefit sources with a single card
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