A new MasterCard debit card is being touted as a great option for federal beneficiaries who are unbanked or underbanked, but who need a no-cost or low-cost alternative to using costly check cashing facilities and carrying large amounts of cash. The Direct Express Debit MasterCard provides another tool for those looking for safety and security. Both the U.S. Department of the Treasury and the Social Security Administration encourage users to consider this financial product, “Our goal is to provide the right resources for Americans that allow them added value and benefit”, said one government spokesperson.
This prepaid debit card is being touted as an easy and much safer method for those who receive any kind of government benefits, including Social Security and Supplemental Security Income (SSI).
Users aren’t required to own a bank account and users can incorporate their Direct Express prepaid Mastercard to make purchases, pay bills and access their cash at thousands of nationwide locations.
With promises of no longer having to wait for traditional mailed checks, concerns about those traditional paper checks getting lost or stolen and the overall safer method, officials believe this will eventually become the method of choice for recipients. Eventually the goal is to eliminate costly paper checks.
But why this debit card and why now?
This particular debit card differs from others because it was designed exclusively for those receiving federal benefits. Not only that, but the U.S. Department of the Treasury negotiated low fees for Americans who choose to use the card.
Note: the Direct Express debit card isn’t new, though it has been significantly revamped to meet the needs of today’s recipients.
Did you know that social security and SSI recipients who use check cashing services every month will pay, on average, $6 to do so? The Treasury Department reports some recipients can pay up to $20 and more.
This debit card was designed to eliminate those heavy fees. Those on tight budgets know full well that every penny counts and if they’re paying $20 a month, that’s $240 a year in just fees.
Plus, if they buy money orders to pay their monthly obligations, those fees add up too. Money orders are free with the Direct Express.
What makes this debit card so different is that this card offers cardholders free access to their money. There are no sign up fees at all.
The absence of a requirement for a bank account or credit check is an added bonus. Plus, there are more than 50,000 surcharge free network ATMs that users can access.
It’s startling, but there are about 4 million social security and SSI recipients who do not have bank accounts. They have had to rely solely on paper checks for their monthly payments.
The Direct Express Debit MasterCard eliminates those frustrations with many of its great features, say government officials. According to the latest press release, this unique debit card brings to its users:
Safety, in that paper checks can be “vulnerable to financial crimes such as check fraud, or delivery delays due to weather.” The Direct Express card eliminates, in its entirety, the risk of lost or stolen checks while providing instant access to their funds without worrying about losing their cash.
The debit cards are FDIC-insured up to the maximum amount allowed by law. Users define their own personal identification number (PIN) for use at ATMs and retail locations. If the cards are ever stolen or lost, they are replaced quickly. It’s all about the convenience, said the presser.
One of the most attractive features is the absence of overwhelming fees. There’s no cost to get the card and no monthly fees. There are fees associated with some of what the program refers to as ‘optional’ transactions, though for the most part, users can use the card with no fees at all.
Things like cash back at the point of purchase at retailers is fee free and using a teller at banks or credit unions is free as well. There’s one complimentary ATM withdrawal for every deposit made to the account.
Note, though, the ATM owners may still charge if they are not part of the Direct Express network. According to the Direct Express website, other fee free services include:
- Balance information at ATMs, by phone or online.
- Optional notification of deposits to debit card by phone, email or text message.
- Optional low balance alert when account balances falls below a certain level.
- Access to the toll-free customer service number and website 24 hours a day, 7 days a week.
- One free replacement card per year (additional replacement cards available for a fee)
The debit card is issued by Comerica bank.
Do you receive government benefits and if so, does this sound like a viable financial tool or do you prefer cash? Share your thoughts with us.