When you’re squeaking by on unemployment benefits, the last thing you want to do is pay money to get that money.
But if you use a debit card to get your unemployment benefits – an option in Arizona – and aren’t careful, you could end up paying fees when you make withdrawals.
You could be charged at least $1.50, for example, every time you use an ATM not affiliated with JPMorgan Chase, Washington Mutual or Allpoint more than once a week to withdraw cash.
By sticking to ATMs with those companies, you can spare yourself the fees. Or you can use the “cash back” feature when you buy groceries, for example.
Arizona is one of 30 states that have struck deals with banks to provide unemployment benefits through debit cards. States are pulling away from mailing checks because of high postal fees.
The debit cards, though, have raised concerns in other states because recipients who are already barely scraping by on unemployment insurance are being charged extra bank fees, including overdraft fees of up to $20 from some banks.
In Arizona, the average unemployment-check recipient gets about $220 a week. About 82,200 Arizonans are receiving unemployment benefits. Because of rising layoffs, 8,100 to 10,800 new claims have been filed every week so far this year.
After competitive bidding, JPMorgan Chase Bank has won the exclusive contract after competitive bidding to provide unemployment insurance debit cards in Arizona to those who want them.
The cards are reloaded with money weekly as long as recipients continue to qualify for unemployment insurance.
All new recipients are given the electronic payment cards. But they have the option of having the money deposited into their regular bank accounts. The Arizona Department of Economic Security wasn’t able to say what percentage continue to use the debit cards.
“Debit cards are a very safe and convenient way for recipients to obtain and use funds. And they usually cost less for the state to administer, saving taxpayers money, too, said Mary Jane Rogers, a spokeswoman for JPMorgan Chase in Arizona.
Although some banks in the country are charging up to $20 for recipients for overdraft fees for customers who try to spend more than they have on the cards, she said JPMorgan Chase does not charge overdraft fees for the cards.
The cards are preloaded with money and can’t be spent for more than that. Recipients can find out their balances by going to the Web site or calling the toll-free number listed on the back of the cards.
The Associated Press contributed to this article.
Avoid bank fees
• Use the debit cards to make withdrawals only from ATMs affiliated with JPMorgan Chase Bank, Washington Mutual or Allpoint, a nationwide chain of no-charge ATMs.
• You can withdraw money from an ATM not affiliated with those companies once a week at no charge. But if you use an ATM not affiliated with those companies more than once a week, you will be charged $1.50 by JPMorgan Chase. You also may be charged fees by other banks.
• When you use the debit card to buy groceries, gasoline or other things, use the “cash back” feature to receive cash.
Sources: JPMorgan Chase, Arizona Department of Economic Security.