Social Security goes plastic - East Valley Tribune: Business

Social Security goes plastic

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Posted: Monday, September 8, 2008 5:11 pm | Updated: 11:48 pm, Fri Oct 7, 2011.

A new prepaid debit card could drastically reduce the number of paper Social Security checks mailed each month, therefore saving trees and putting more crooks out of business, treasury officials say.

The U.S. Department of the Treasury's Financial Management Service has introduced its Direct Express Debit MasterCard program to Social Security and supplemental security income recipients across Arizona and the nation. It is a new option for federal beneficiaries who do not have a bank account and are looking for a no-cost or low-cost alternative to using check-cashing facilities and carrying large amounts of cash.

Seniors can sign up for the card by calling (877) 212-9991 or visiting www.usdirectexpress.com.

More than 119,000 paper checks for Social Security and supplemental security income are sent in Arizona every month, including more than 72,000 in the Valley, said Alvina McHale, legislative and public affairs director for the Financial Management Service.

"It's still a lot of people in Arizona who are really operating in a world that is really far more vulnerable than an electronic payment world," she said.

The Treasury Department has partnered with Comerica Bank to issue the debit card strictly for payment of federal benefits. There is no sign-up fee, and no bank account or credit check is required.

Cardholders can make purchases, pay bills and get cash at ATMs and stores nationwide.

"The money is loaded onto the cardholder's account each month, so whenever you get a paper check, that would be the same day of the month that you would get money loaded onto the card," McHale said.

Cardholders can manage their accounts online or, for 75 cents a month, request a paper statement, she said.

"There's no way to overdraft the card and incur fees, and that's something that's been a problem for some people with other kinds of debit cards," McHale said. "The card would be declined, so there's not a way to go over."

Paper checks are much more expensive to produce than electronic payments, she said.

"It's 98 cents to do a paper check and only 10 cents to do either a debit card or a direct deposit," McHale said.

"That sort of differential is more than about $100 million a year, and that's money that can stay in the Social Security Trust Fund and not be used to pay for the payment mechanism," she said.

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