Valley Updates

Are payment cards all they are cracked up to be?

Payment cards have become part of the mainstream financial world in the past decade, serving as a solution for those consumers who do not have or are not eligible for a traditional checking account. These cards can be provided by an employer to pay wages, offered as an option to receive a tax refund, or are offered by a third party direct to the consumer as an alternative to traditional banking.

Some widely used cards can be issued through an agreement with an employer, or an individual can sign up directly and have funds deposited onto the card and then spend from that card. Many employers provide this option as an alternative to employees who elect not to receive direct deposit.

However, it is important to know that employees do have rights when it comes to how they receive a pay check. In Massachusetts, workers have the right to request a paper check instead of a reloadable card. For those who already have a bank account, direct deposit is the simplest option. If you don’t currently have a bank account, learn more about a Checking Account with Pioneer Valley Credit Union. You may be surprised to find that a Checking Account can be a less expensive and more convenient alternative in the long run, compared to a payroll card.

If you do want to opt in to using a payment card, whether it is for payroll or a tax return, it is critical to be aware of the fees charged by the card issuer. Understanding why, and when, fees are going to be changed is the key to keeping your hard earned money instead of giving it away to your card issuer.

Tax refund cards are advertised by large tax preparers. The allure of these cards can include an advance on your refund, which is particularly appealing to many people. This is portrayed as a faster way to get paid, but in reality, interest changes and fees do apply, sometimes with annualized rates of up to 36 percent! Many consumers fail to understand the tricky terms of these loans, which is why it is critical to read the fine print on offers like these.

Many people use tax returns to pay off debt or save for a big expense. Utilizing a prepaid card for your refund can make saving difficult, because of a long list of applicable fees. Inactivity fees, transaction fees and ATM fees are just some of what may be changed depending on how the card is used. These charges can potentially make using your prepaid card expensive, whether you plan on keeping the funds on the card, taking out cash, or using the card as payment for a bill.

If you are seeking more benefits and a hassle-free experience with having access to your money Pioneer Valley Credit Union is here for you. With great benefits like Cash Back Rewards, free debit cards, free checks for life, free Online Bill Pay, direct deposit and no monthly fees, the decision is simpler than you think.