Treasury Dept. Rolling Out Social Security Debit Card
No bank account? No problem. Now you can have your Social Security benefits loaded directly onto an electronic debit card that works like a gift card from Uncle Sam.
The card is part of a push by the U.S. Treasury Department to encourage the 10.5 million people who still get a paper Social Security check once a month to switch to electronic payments. The change could save some recipients hefty check-cashing charges, and it could save the federal government as much as $42 million a year, Treasury officials said.
The only stumbling block: About 2.1 million Social Security recipients don't have bank accounts. Neither do about 1.8 million disabled and low-income people who receive Supplemental Security Income (SSI).
The solution: Direct Express cards, managed by Comerica Bank, which allow recipients to carry their benefits on a piece of plastic that can be used like a debit card at any bank, retail outlet or automatic teller machine that accepts MasterCard.
"After the card is activated, instead of us sending out a check to a post office box and hoping it doesn't get lost or stolen, they will know that their benefits are deposited in their card account on their payment date," Judith R. Tillman, commissioner of Treasury's Financial Management Service, said yesterday. "They can go to an ATM, go to a post office if they need a money order, go to almost any bank or . . . use it at retail locations to pay for a purchase and get cash back."
Tillman said the card is free and there are no fees for using it.
In a pilot project last year in Illinois, about 3,000 people activated the card. Eighty percent said they were satisfied, with 60 percent reporting that the card saved them money on check-cashing fees. Since then, Treasury has begun slowly advertising the card to all Social Security recipients who receive paper checks, starting in Texas, Louisiana, Oklahoma and Arkansas. Inserts are now going out to the Southeastern states, with the rest of the nation to follow by October.
To sign up, look for an insert in your Social Security check between now and October. You can call Direct Express toll free at 877-212-9991 or go online to http://www.usdirectexpress.com to find out more information.
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