The Case for Payroll Debit Cards in 2024

Payday is the best day of the week for many of us.

But how do you actually get your hands on your hard-earned cash these days? Paper checks are old school. Direct deposit is all the rage.

In fact, a 2019 study by the FDIC on how people manage money found that 7.1 million U.S. households don’t even have a bank account.

Therefore, there’s another option gaining steam – payroll debit cards. These pieces of plastic offer a new way to access your pay.

But are they right for you? Let’s learn the pros, cons, and everything in between about payroll debit cards.

What Are Payroll Debit Cards?

Basically, they work a lot like the debit card already in your wallet. Each pay period, your company loads your earnings onto the card. Then you can use it to get cash, shop online or in stores, and more – just like a bank debit card. These cards give you a way to get your pay without direct deposit or paper checks. Perfect for folks without bank accounts.

How It All Started

Payroll cards first popped up in the 90s but have blown up recently. A 2019 survey found 7.1 million U.S. households don’t have bank accounts. Even people with bank accounts are digging these payroll card things. Use has tripled from 2017 to 2022 as folks realized how handy they can be. Experts predict the growth will keep cruising along over the next few years.

Perks for Employers

Employers are loving payroll cards too. Here’s why:

Ditch Expensive Paper Checks

Even a small stack of checks costs money to print and mail out. Payroll cards let companies slash this expense by going fully digital. Cha-ching!

Simplify Paydays

Trying to wrangle checks, direct deposit, and cash is a big freaking headache. Payroll cards let employers pay every employee the same way – easy peasy!

Enhanced Security

Checks can get lost or swiped pretty easily. Payroll cards keep your hard-earned money secure until you go to spend it. Lose your card? No prob! Your company can quickly cancel it and get you a new one.

Options for Unbanked Staff

For employees without bank accounts for direct deposit, payroll cards give a practical alternative beyond physical checks. Everybody wins!

Perks for Employees

In addition to making your boss happy, payroll cards can also do great things for you:

Faster Cash Access

Money on these cards is available on payday, rather than waiting for checks or direct deposit. Your cash is right at your fingertips!

Total Convenience

Use payroll cards anywhere debit cards are accepted online, in stores, at ATMs – the works! Way better than running to the bank to cash a check.

No Extra Fees

Some prepaid cards nail you with fees when you go to buy stuff. Not payroll cards! Shop away fee-free.

Protection from Fraud

Perks like zero liability fraud coverage come with most payroll cards to keep your money safe. No worries if your card gets lost or stolen!

Potential Pitfalls

Payroll cards aren’t all rainbows and butterflies though. There are a few potential downsides:

Annoying Replacement Process

Dealing with losing a card loaded with your pay could be a hassle, even with fraud protection. Getting a new card rushed to you could be a pain.

Surprise Fees

You might get hit with extra fees for things like out-of-network ATM use and overdraft attempts. Lame! Ask for details.

No Interest Earnings

Unlike money chilling in your savings account, balances on payroll cards don’t earn interest. Bummer!

Regulations Galore

These card programs have a web of legal rules to follow that your employer has to keep up with. No fun.

How Payroll Cards Work

If payroll cards sound decent to you so far, here’s a quick rundown of how they work:

• You sign up for the card through your employer
• Company sends your info to the card issuer
• Card issuer makes the cards (usually Visa/Mastercard)
• Your pay gets loaded onto the card each payday
• Activate the card and start spending that cash!
• Check your balance and statements online or on the card app
• Card issuer replaces lost or damaged cards ASAP
• Issuer also handles regulatory stuff, security, support – the works!

Still Have Questions?

If you still have questions about whether payroll cards are the move for you, reach out to the pros at The Payroll Company. They can clue you in on the payroll card services that could fit your needs. Give us a call today and get answers to all your payroll card questions!