Are You Being Paid With a Debit Card with Hidden Fees?

With the ease of direct deposit or the option of being paid by check, it may not make sense for your employer to pay you with a prepaid debit card instead of through traditional methods. However some employers are choosing this option because it saves them money on their payroll expenses. Often prepaid debit cards have hidden fees that can negatively affect how much you receive in payment. There are ways that you can work around the fees associated with the prepaid debit card.

1
Consolidate Your Transactions

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Often the prepaid debit cards will have a per fee transaction. The transactions can add up quickly, especially if you are using the debit cards for every small purchase that you make. You can limit the number of fees that you make by making one large withdrawal each pay period. You can request the remaining balance as cash back when you go grocery shopping or do one or two large ATM withdrawals each week. Although you do still pay some transactions fees, you are minimizing the amount that you have to pay.

2
Transfer the Balance to Your Bank

Some banks may allow you to transfer the money on your prepaid card to your bank. You will still likely pay a transaction fee, but this option will let you transfer the exact amount that is on your card to your bank account. If they do not offer this option, you can do one or two ATM withdrawals and get the majority of your money that way and then deposit it into your bank. You will need to allow a few days for a transfer to go through completely, and if you are paid weekly, this may be a bigger hassle than it is worth.

3
Monitor Your Card Carefully

It is important to carefully monitor the balance and fees that you accrue with each transaction. This will allow you to use your card more effectively. It can also prevent you from running out of money on the card when you still have bills to pay or things you need to get before your next paycheck. You will need to keep a running balance on the card, the same way you do with your checking account. Be sure you carefully read the small print and learn if there are charges to check your balance online or at an ATM. Understanding how the card works can help you avoid unnecessary fees.

4
Ask Your Employer for Other Payment Options

One of the best ways to change the situation is to continue to ask for different payment options. The prepaid debit card may be a good solution for someone who cannot currently open a bank account and qualify for direct deposit. However, direct deposit is not difficult to set up, and you may want to request that your employer offer that option too. It can be frustrating to have part of your money held up in fees because your employer is forcing you to use a specific payment method.

5
Look for a New Job

If your employer is not willing to listen to your concerns and offer alternatives, you may need to start looking for a new job. Generally this is a sign that they are not willing to work with you or address your concerns, which means they may not be the best employer available. In smaller, economically depressed communities, you may just be grateful to have a job and to keep working, but you should continue to look for new opportunities. You may want to consider going back to school and gaining additional skills that will help you land another job. You may also want to consider moving to another area if there are not enough good jobs where you currently live.