Welcome to The Times in Plain English   Click to listen highlighted text! Welcome to The Times in Plain English

Paychecks Turning Into Debit Cards… With Fees

July 8, 2013
Plain English Version

More workers are getting their paychecks in the form of prepaid cards. Banks are doing whatever they can to convince employers that this is the cheapest way for them to pay their employees. Sometimes banks even pay employers for every worker who signs up for a card.

With prepaid cards comes a long list of fees workers may have to pay to use the cards, including:

  •  A.T.M. fees
  • Payments for paper statements
  • Payments to replace a card
  • Payments for inactivity
  • Payments for overdrafts
  • Payments for closing an account

The fee payments may result in some workers earning less than the minimum wage.

Big companies and big banks are the big winners. They promote the prepaid cards by saying the cards give employees choices in how to receive their wages. And often the cards are convenient to use, even if costly.

Taco Bell, Walgreens and Wal-Mart are among the dozens of well-known companies that offer prepaid cards to their workers.

In their defense of using cards, employers say that some workers do not have bank accounts and would have to go to check cashers and pay a fee. Furthermore, more Americans are not using banks.

Employees say the choices are not always made clear to them. One employee said he earns $7.25 an hour working at a drive-through station at a McDonald’s in Milwaukee. He says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

“It’s pretty bad,” he said. “There’s a fee for literally everything you do.”

Twenty-five states allow employers to use prepaid cards and not offer paper checks.

Source: The New York Times

Print Friendly

In Brief

Sitting, Standing, Moving: The Road to Health 

At some jobs, you stand all day. At some other jobs, you are sitting at a desk. Whether standing or sitting, eight hours of...

Protecting the Unborn and Newborn From Asthma

The number of people with asthma is growing. About 300 million people worldwide have it. About 26 million people in America have it. Only...

Too Many Antibiotics Can Make Children Heavier

Children who use a lot of antibiotics gain more weight than others. The weight they gain may stay with them into adulthood.

A study of...

Enemy of the Day: Sugar

The U.S. government is saying how much sugar we should consume. They suggest that only 10 percent of the average person’s calories should come...


  • dictionary
  • English Dictionary

Double click on any word on the page or type a word:

Powered by DictionaryBox.com
Click to listen highlighted text!