Some unemployed workers have expressed their dissatisfaction with learning that they have to pay bank fees in order to access their unemployment benefits. This change comes as many states attempt to reduce costs associated with cutting paper checks by partnering with banks to issue funds via prepaid bank cards.
According to a recent article by Associated Press, as many as 30 states are participating in this plan.
How Banks are Charging Fees for Unemployment Benefits
When workers have been approved for unemployment benefits, they are issued prepaid bank cards from which they are able to withdraw funds from ATMs as needed. However, the word “prepaid” may seem a little deceptive to those who discover after making a withdrawal that they have been charged anywhere from 50 cents to $1 per transaction.
How Do the Banks Benefit?
So we know why states have decided to take part in these plans, but what exactly are banks getting out of the deal? They get the potential for earned interest, as well as roughly 1-3% of each transaction made. This type of incentive will likely inspire more banks to enter in this practice.
It should be noted that customers do have an alternative to the transaction fee. If customers visit the actual bank and ask the teller for a cash advance, they won’t be charged a fee.
In the end, workers probably wouldn’t feel as disappointed with this adjustment if they were given the option of choosing between a paper check and a bank card. While some don’t mind the charges for the sake of convenience, those who prefer paper checks may feel that they’ve essentially been robbed and insulted in a difficult time.
What do you think about banks charging these fees? Also, be sure you’re ready for anything with this guide on how to prepare for a layoff.