SS Beneficiaries to Receive New Debit Cards
Social Security beneficiaries who have no bank accounts will soon get the “Direct Express” cards to be used in withdrawing their monthly benefit payments, the Department of Treasury’s Financial Management Service (FMS) announced recently.
With the introduction of this new system, it would now become much easier for beneficiaries to receive their regular monthly benefits payments at ATMs and financial institutions nationwide. They will also be able to use the card ‘to make purchases at retail locations, pay bills, and make online transactions’
Through the system, a cardholder is allowed one free ATM cash withdrawal per month. Any other cash withdrawal will be charged 90 cents. Other transactions will also be charged.
FMS said the accounts will be PIN-protected, FDIC-insured and subject to federal consumer protection regulations. The government expects to save about $44 million by use of the electronic deposits under this new system.
The Direct Express cards will first be introduced in Texas, Arkansas, Oklahoma and Louisiana this spring and phase in the program throughout the country by the end of summer.
The Treasury Department said that if every federal beneficiary without a bank account signs up for a debit card, the government will save millions each year in printing and mailing costs.
Treasury Department officials said they selected Comerica as the financial agent for the new federal initiative partly because it already provides prepaid card services for 13 states.
The Direct Express cards will provide a safer and more convenient alternative to checks, which may be stolen or delayed in the mail, the officials added.
Government officials also predicted that Social Security recipients without bank accounts will pay less in card fees than they do now at check-cashing services.
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