3 questions to ask about payroll cards

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Payday. Isn’t that everyone’s favorite workday?

Actually, the satisfaction of pocketing earnings is spoiled if workers don’t have bank accounts and must pay high fees to a currency exchange to cash their paychecks, consumer advocates say.

Instead, they could carry a “payroll card,” which can be used online and at stores and ATMs.

Carrying a logo, with brand names like MasterCard or Visa, payroll cards look just like debit cards, says Michael Chittaro, senior director of prepaid products for Visa. And, they function like prepaid debit cards, but instead of the user loading money onto the cards, an employer electronically loads a worker’s earnings on it every pay period.

Right now, a small segment of workers receive payroll cards, notes Bill Dunn, director of government relations for American Payroll Association.  

They are utilized in retail, food services and businesses with many hourly workers and are less costly to administer than paper checks, Chittaro says.

Ron Hynes, group executive of MasterCard Global Prepaid Solutions, says many state and local governments also are giving workers the payroll card option.

But cards can cost workers, too, warns Lauren Saunders, managing attorney of the National Consumer Law Center. Below are points to consider if you’re offered plastic pay.

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