Credit Union Times, July 29, 2009

More than 500,000 Social Security recipients have signed up to receive their benefits on a prepaid debit card, and more than 88% said they would recommend that other recipients sign up.

The U.S. Treasury Department’s Financial Management Service contracted with Dallas- based Comerica Bank to issue the card nationally in 2008. The card carries the MasterCard brand. The service designed the card for the more than 4 million Social Security recipients who lack bank accounts or are otherwise reliant in paper checks.

“Millions of senior citizens, people with disabilities and other Americans who lack access to traditional banking services, now have a safer, more convenient way to receive their federal benefit payments than paper checks,” said FMS Commissioner David Lebryk. “In its first year, the card has helped to bring hundreds of thousands of Americans into the financial mainstream. With this card, people now have a lower-cost alternative to visiting check cashing facilities and carrying large amounts of cash.”

Surveyed about what they like about the cards, cardholders said they were especially pleased with the card’s safety and immediate access to their money.

More than half of the satisfied cardholders said they liked the convenience the card offers. There’s no need to go anywhere to cash or deposit a check to get cash, pay bills or make other purchases.

One in five satisfied cardholders stressed security as a reason for their satisfaction. If a card is lost or stolen, it will be replaced. In addition, the card accounts are FDIC-insured.

By David Morrison
dmorrison@cutimes.com