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Debit cards draw a minus(Las Vegas Review-Journal Via Acquire Media NewsEdge) Feb. 26--A program designed to save the state money could cost Nevadans who aren't careful about where they cash in their unemployment benefits. Nearly 95 percent of the Silver State's jobless receive unemployment benefits on debit cards rather than paper checks, and consumers tapping the plastic payments could incur banking fees at some withdrawal locations, officials from the state's Department of Employment, Training and Rehabilitation said. It's a nationwide trend that grabbed the attention of Congress last week, as key representatives called for a closer look at how states disburse unemployment benefits. Some 30 states have replaced unemployment checks with debit cards issued by banks including Citigroup, Bank of America, JPMorgan Chase and US Bancorp. The banks administer debit cards at little or no charge to the states, but they collect revenue from fees when the unemployed tap into their benefits or use the cards at stores and restaurants. Nationally, fees vary widely, ranging from 50 cents for balance inquiries to $20 for overdrafts. In Nevada, which uses debit cards issued by Wells Fargo, the cards are charged $1.25 for every withdrawal at any automated teller machine that isn't at a Wells Fargo or 7-Eleven store. Nevada's employment department issued a statement earlier this week advising the state's residents on avoiding the transaction costs. Nevadans on unemployment assistance can make unlimited free cash withdrawals at financial institutions bearing the Visa logo. They can also make an unlimited number of free cash-back transactions on purchases at grocery stores and other participating retailers. They can use their debit cards to shop or pay bills online, and they get two free ATM withdrawals a month at any Wells Fargo or 7-Eleven. "We want to assure claimants that they have a number of opportunities to use their cards at retail outlets like a regular debit-credit card and withdraw cash without any of their money going toward fees," said Cynthia Jones, the employment department's deputy director and administrator of its Employment Security Division. "They just have to use caution and wisely manage their debit cards like they would if the card was tied to their checking account." The department began sending out debit cards in November 2007. The bureau has made more than 2.5 million benefit payments through debit cards. In its first year, the initiative saved the state $800,000 in envelopes, check costs and postage. Payments get to recipients more quickly, Jones said, and complaints about lost mail or checks returned due to address changes have dropped significantly. The cost savings allowed the department to hire more call-center staff, Jones said. For additional information on unemployment debit cards, visit www.eppicard.com. The Associated Press contributed to this report. To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com. Copyright (c) 2009, Las Vegas Review-Journal Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |