Fee-Heavy Prepaid Cards Gain Momentum as Paychecks

Fee-Heavy Prepaid Cards Gain Momentum as PaychecksMore American workers, many of whom earn low wages, have to pay fees to get paid.
The notion makes no sense, but it is a growing trend as mostly hourly workers are increasingly getting a prepaid debit card instead of a paper paycheck or direct deposit.
The problem amounts to fees. In many cases, exorbitant fees to do such things as withdrawal money from an ATM. In some cases, you get hit with a fee if you do nothing — so-called inactivity fees that can cost you $7.
The practice utilized by big-name employers, such as McDonald’s, Taco Bell, Walgreen and Walmart, came under national scrutiny recently with the case of a single mother from northeastern Pennsylvania. A lawsuit filed last month in Luzerne County on behalf of Natalie Gunshannon and other McDonald’s employees alleges that they were provided a fee-heavy debit card and each had to use it to access their earnings.
The New York Times reports that these prepaid debit cards are particularly popular with retailers and restaurants. And they are quickly gaining popularity.
In 2012, $34 billion was loaded onto 4.6 million active payroll cards, according to the research firm Aite Group. Aite said it expected that to reach $68.9 billion and 10.8 million cards by 2017.
Read the New York Times article.

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