What is a pay card?

image : homo sitting on the couch in his exist room, reading on his pad A pay card, or payroll wag, is one manner of getting your paycheck. Pay cards are a kind of reloadable debit card — employers can give them to their employees and deposit paychecks onto the cards rather of printing checks or using direct deposit. They ’ rhenium good for employees who don ’ t have deposit accounts or other reloadable debit cards. But pay cards don ’ t give you the range of services and ability to manage your money that bank accounts or other prepay cards do. column note : Credit Karma receives compensation from third-party advertisers, but that doesn ’ t affect our editors ’ opinions. Our third-party advertisers don ’ thyroxine inspection, approve or endorse our editorial content. It ’ south accurate to the best of our cognition when posted .Advertiser Disclosure

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It’s payday, and your employer wants to pay you using a pay card. What does that mean? A pay card is one way to get your pay — but it may not be your best option.

If your employer offers to give you your wages on a menu, it ’ s probable offer you a pay card, or a payroll tease. If you accept, you ’ ll receive your paycheck as a calculate deposit onto the card alternatively of getting a physical check or a conduct deposit into your bank account at the end of each pay up period. You can then use the menu for purchases or to withdraw cash from an ATM, exchangeable to a debit calling card .
pay cards can be helpful if you don ’ t have a determine report to deposit paychecks into. Some employers may prefer using pay cards because it could save them time and money — with pay cards, they don ’ t have to print and distribute checks .
But pay cards aren ’ thymine always the best way to receive your give because of potential fees and limitations in how you can manage them .

What you need to know before getting a pay card

Pay card fees

pay cards typically don ’ t have monthly or care fees, but they may charge you for other things that can add up. here are some examples .

  • Activation fee
  • ATM cash withdrawal fee
  • Inactivity fee (if you haven’t used the card in a while)
  • Purchase fee
  • Customer service fee
  • Cash reload fee

Make certain to read the fine print to find out what fees your pay tease would come with. The fiscal initiation providing the card is required to give you disclosures about electric potential fees before you agree to sign up for a payroll card .
once you ’ ve read the fee disclosures, think about the fees you ’ d credibly be hit with. For case, if your pay menu doesn ’ t waive ATM fees but you regularly need cash, those fees could pile up.

If you decide the payroll card international relations and security network ’ deoxythymidine monophosphate for you, your employer must provide you with at least one alternative, like paper checks or address deposit .

Managing a pay card

If you get a postpaid card, it ’ s a good estimate to stay on top of the balance on your card and any fees you ’ re being charged. Check to see what reporting options your employer ’ s pay poster offers before agreeing to a yield card — options can range from on-line monitoring to having to actively request written statements .
You besides need to consider how you like to manage your money, and how long you plan to stay with your employer. If you tend to hop between jobs or you have multiple jobs, you could end up with a stack of different pay cards to manage. Or you may have to pay fees for moving money from one pay card to another — which could get expensive and time-consuming .

Can I overdraft on a pay card?

Some pay cards allow you to spend more money than you have in your history, which can result in overdraft fees. Check the menu ’ s finely print to see if it allows you to opt in to overdraft protective covering, and, if so, what the fees would be .

What happens if my pay card is lost or stolen?

If your pay up card is lost or stolen, you should notify the fiscal initiation that issued the wage batting order immediately so that it can issue a successor batting order. If you report the loss within two business days of teach of the loss or larceny, your indebtedness for deceitful charges is up to $ 50, but you may be liable for more if you wait to report the suffer wag .
Paying fees to recover a lost card international relations and security network ’ deoxythymidine monophosphate fun. But if you lose cash or an uncashed arrest, you ’ ll never see that money again. Pay cards have protections exchangeable to early postpaid accounts. Learn more about check accounts and postpaid debit cards below .

Will the pay card affect my credit?

No. Pay cards, like all prepay cards, do not affect your credit scores .

Is a pay card right for me?

When you ’ re trying to decide if a pay circuit board is a good option for you, foremost think about the electric potential fees. Are they something you ’ ra bequeath to deal with ? If so, consider how you like to manage your money and how frequently you expect to change jobs .
Pay cards may be challenging if you ’ ra juggling multiple jobs or if you change jobs frequently. In either shell, if you had a give card with each employer, that could leave you with many disconnected pools of money to manage. You may prefer to keep your money in a single plaza .
On the other hand, if you can ’ t open a savings bank history, a pay card might be a great option for you.

Pay card alternatives

Employers have many options for payroll, including physical checks, directly deposits into a check account and pay cards. If your party boss is suggesting a pay card, note that it ’ randomness not your only choice. Employers must offer you at least one option to receiving your paycheck on a pay calling card. Pay cards may seem like a simple solution, but they ’ re not ideal for everyone. If you decide to go with an option to pay cards, take a expect at the options below for daily money management .

  • Checking accounts: Traditional bank accounts tend to offer better protections, like FDIC insurance, and generally come with a debit card. To get started, read our guide on how to open a bank account. Once you’re set up, you can ask your employer to deposit your paychecks directly into your bank account, or you could deposit paper checks yourself.
  • Prepaid debit cards: Prepaid debit cards are also reloadable debit cards, but they don’t require an employer to set them up — you’d own your debit card yourself. With a prepaid debit card, you can set up direct deposit, make purchases and withdraw cash from ATMs. They have fraud protections similar to what pay cards offer.

Next steps

If you don ’ t have a determine account or can ’ metric ton exposed one, pay cards might be a good option. But as with any fiscal decision, do the mathematics to see which payroll option is right for you — receiving your paycheck via traditional print check, direct down payment into a checking account or direct deposit onto a pay poster. When you ’ re considering your options, compare the fees and ease of habit to see what ’ s best for you .
About the author: Sean McQuay is a long-time personal finance nerd. He’s passionate about budgets, credit cards, and earning useful rewards with minimal effort. He lives in the San Francisco Bay Area and is a father to three rambunctious kids. Sean McQuay is a long-time personal finance swot. He ’ mho passionate about budgets, credit cards, and earning useful rewards with minimal campaign. He lives in the San Francisco Bay Area and is a church father to three boisterous kids. Read more.

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