Social Security Debit Card

In January of 2008, the Treasury Department announced plans to offer prepaid debit cards for recipients of Social Security. Coamerica Bank was chosen as the debit card issuer, and the Direct Express card should provide users with safer, and more convenient, access to their Social Security benefits compared to today's paper checks.

In this article we're going to explain the benefits of choosing the Direct Express debit card versus paper checks. We'll also quickly cover the fees that can be charged when using the card, as well as information concerning where you can go to sign up for this new offering.

Debit Cards for Social Security

Additional Resources

There is no doubt that issuing debit cards to Social Security recipients is a win-win proposition. This new card allows the Treasury Department to more effectively serve the estimated 4 million Social Security and Supplemental Security Income (SSI) check recipients that do not have bank accounts. In fact, if all of those recipients were to sign up for the card, the annual savings to taxpayers would be in the neighborhood of $44 million each year.

The Direct Express debit card removes the risk of check delivery delays due to poor weather or local emergencies. It also eliminates problems related to lost, forged, or stolen checks - which account for nine out of ten problems with Social Security payments according to the Treasury's Financial Management Service bureau.

Direct Express Debit Card

The Direct Express debit card is a prepaid card that will be offered to those individuals receiving Social Security and SSI benefits. The card is expected to be available in several states by the Spring of 2008, and accessible nationwide by the Summer of 2008. In April 2008, the Treasury plans to start a marketing campaign aimed at encouraging benefits recipients without a bank account to sign up for the debit card.

Benefits of Direct Express

Once enrolled in Direct Express, monthly payments will be automatically deposited into the cardholder's account. This provides faster access to money, as well as improved convenience. Cardholders can use a nationwide network of 56,000 ATMs, in addition to banks, to remove cash directly from their accounts. Alternatively, they can use their cards at local retail locations, as well as over the Internet to make online purchases or pay bills.

In addition to the added safety of direct deposit, all accounts are PIN-protected and insured by the FDIC.

Debit Card Fees

The issuer of the debit card, Comerica, will make money from cardholder fees including interchange fees (which are charged to retailers when they accept a debit card as payment), and the float on funds in cardholder accounts. For example, the money residing in accounts can be invested by Comerica prior to its use by accountholders. Initial estimates, provided by Comerica, indicate they expect between 2.5 million to 10 million cardholders by 2013.

Cardholders are entitled to one free ATM cash withdrawal per deposit per month. Comerica will charge $0.90 for each additional ATM withdrawal. And just like existing arrangements with debit-card holders, users may face surcharges at certain ATMs. Other fees include a $0.50 charge for each online bill payment, and a $0.75 fee to receive a paper statement each month.

ATM surcharge fees can be avoided if cardholders utilize a network of more than 56,000 ATMs managed by 7-Eleven and PNC Bank. Balance inquiries and cash withdrawals at teller windows will be free of charge. There are also no overdraft, inactivity, or declined transaction fees. Cardholders can sign up for deposit notifications and account balance alerts.

Obtaining a Direct Express Debit Card

The Direct Express program was previously administered by JPMorgan Chase. In the Spring of 2008, accounts of existing cardholders will be moved to Comerica Bank. These cardholders need to make sure that JPMorgan Chase has their current address on record. You can call JPMorgan Chase Customer Service at their toll-free telephone number (877) 789-5895, 24 hours a day, 7 days a week to notify them of a change in address.

If you don't have a bank account, then you can call (866) 675-5648 to sign up for the Direct Express Card. If you're interested in direct deposit, then you can visit the Treasury's Go Direct website or call toll-free at (800) 333-1795. Once signed up, you can enjoy all of the safety and convenience that direct deposit of your Social Security benefits has to offer.

About the Author - Social Security Debit Card

Buying Insurance Resources on the Web