In 2009, we reported on the problems some West Virginians were having with a then-new unemployment program that gave people their benefits on prepaid debit cards, rather than old-fashioned checks. People who were already struggling to pay the bills were getting hit with big fees when they went to some ATMs to withdraw their benefits.
Today, 40 states use debit cards instead of checks to distribute unemployment benefits. West Virginia contracts with JPMorgan Chase for its cards.
The program doesn’t cost the state anything. Instead, the banks shift the costs to the jobless card users by charging them fees for checking their balance, using out-of-network ATMs, and other services.
The West Virginia card has the highest denied transaction fee [$1.75] and out-of-network ATM fee [$2.75] of any state. The card could be improved by eliminating fees for balance inquiries and adding a paper statement option. On the positive side, the card offers unlimited free in-network ATM withdrawals, and the state recently added direct deposit, making it one of only three states to give recipients all three options: direct deposit, a prepaid card or a paper check.