Pay cards are a cost-effective and convenient way for employers to pay their employees. These debit cards can be used anywhere and are loaded with the employee’s paycheck. They are especially useful for employees without a bank account, as they eliminate fees associated with cashing checks. Some pay cards even allow for small check advances.
A pay card is a payroll debit card that generally looks like any other credit or debit card. These cards are typically issued by employers looking for a more convenient and cost-effective way to pay their employees. An employee can have one of these cards and can be paid via direct deposit, even if they don’t have a bank account. The payroll debit card is loaded with the amount of the employee’s paycheck and is generally accepted anywhere a debit or credit card is found, so the cardholder can use the money instantly.
Employers are constantly looking for ways to cut costs and run a more financially fit business. Many times, costs can be reduced by changing the way employees are paid, eliminating shipping and supply fees. Going from paying employees via paycheck to paying with a paycard not only reduces costs, but also time, since deposits are typically set up to run automatically through payroll software.
These cards work similarly to debit cards in that there are no fees associated with activation, card loading, or annual fees. Sometimes, however, there may be fees associated with using certain ATMs to withdraw cash with the card. Every time an employee receives a payment card, they should also be given the terms and conditions associated with the use of the card and should read them carefully to discover any possible fees for withdrawing cash.
Some companies even allow their employees to take small check advances with their pay cards. To do this, the cardholder simply needs to request an amount to be charged to the card between payment periods. That amount is deducted from your next paycheck, sometimes with a small loan fee attached. This can help some employees who have financial emergencies between pay dates.
A pay card can offer employees without a bank account a much more cost-effective and secure way to get their paychecks. Those without a checking account will typically have to pay a fee to cash checks or load them onto prepaid debit cards. If the check is cashed, the employee is in danger of walking out with the full amount in his or her pocket. With a payment card, many fees are eliminated and the card can be easily canceled if it is lost or stolen. If nothing else, this will ensure that the owner keeps a good chunk of their paycheck instead of losing it all.
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