Direct Deposit VS Pay Cards

So, you’ve just started a new job and you were offered a pay card as an alternate option to direct deposit. Should you take it? You think to yourself it’s no different than a regular debit card, right? Think again. There are many differences when it comes to direct deposit vs pay cards and we have the scoop on both.

Are there Fees?

Pay Card: Pay cards can have an absurd amount of fees attached. In most cases, there is a fee to reload your card, a fee to withdraw, a monthly service fee and an activation fee just to have access to your money!

Direct Deposit: Direct deposit allows you to keep all your hard-earned cash. There are no fees for making deposits to your account and with our free classic checking account, there are no monthly service fees!

Which is easier to save with?

Pay Card: It is not easy to save with a pay card. To get money deposited into an interest generating savings account, you would have to manually withdraw the funds off of your pay card and deposit it into a savings account.

Direct Deposit: With direct deposit, you can save effortlessly with a payroll deduction! Your funds are deducted directly from your payroll and placed into the savings account of your choice.

What if I have fraud on my card?

Pay Card: Because pay cards act more like prepaid gift cards, if you experience fraud on your card, your money is most likely gone. In most cases, the only thing you can do is call the customer service number, hope you speak to a real person and request a new card to be sent to you, with a fee.

Direct Deposit: With direct deposit going to a checking account you know your money is safe. With Health Care Family Credit Union, all you have to do is report the fraud, file a police report, fill out our fraud paperwork and we will take it from there. We’ll give you your money back and a new card free of charge.

Can I use my funds anywhere?

Pay Card: Unlike debit cards, pay cards cannot be used everywhere. Some online retailers will not accept pay cards because they are not linked to a checking account. Also, don’t even think about trying to rent a car as car rental establishments require an actual debit or credit card to complete the transaction.

Direct Deposit: If you have your direct deposit going to a checking account, you can use your Visa debit card anywhere Visa cards are accepted.

Will I get paid on time?

Pay Card: The only perk to having a payroll card is most will give you access to your funds 1-2 days before your actual pay date.  With that being said, now that you know how many fees can be associated with a pay card is it worth it?

Direct Deposit: As long as your employer gets their payroll information over to your financial institution on time, you will be paid on your given pay date.

Now that you know the difference between Pay Cards and Direct Deposit, which will you choose?