March 14, 2009

Jobless can get debit cards — with fees

Several states have begun offering unemployment benefits by debit card but those who choose the option find there is a downside -- U.S. bank fees.

Steve Lippe, who began getting benefits in Pennsylvania after losing his job as a salesman in January, told CNN he found out about the fees only after he made the choice. That was when he got the brochure that listed a $1.50 here, a $1.50 there, 40 cents for a balance inquiry, 50 cents to have your card denied.

I was outraged by it, he said. I was very noisy about it. I just couldn't believe it. An outrage is just too weak a word. It's obscene.

The U.S. Department of Labor said about 30 states offer debit cards, with benefits deposited directly into the jobless person's account. Most such transactions are done through large banks like JP Morgan Chase, which has contracts with seven states.

Officials say the cards are easier and safer than getting a check in the mail and they save those without bank accounts high check-cashing fees. Like debit cards tied to bank accounts, they can be used to make purchases without fees.