If you're sleeping in the street or in a homeless shelter, the only thing that amount of money is going to do for you (in California at least) is make you a target for thieves.
Have the near usurious transaction fees typically associated with those cards been regulated away, or are they still yet another way for financial conglomerates to nickel and dime more profits from the most vulnerable, while masquerading as a better option?
I last had my pay deposited onto a prepaid card in 2009, so the laws may indeed have changed. Back then those fees were overly restrictive and quickly ate into my meagre take home (unless, ironically, I withdrew as much as I could with my single allotted fee-less cash withdrawal per pay period)
> Have the near usurious transaction fees typically associated with those cards been regulated away, or are they still yet another way for financial conglomerates to nickel and dime more profits from the most vulnerable, while masquerading as a better option?
I'm having trouble finding the source, but my recollection from a planet money podcast is that they're free to withdraw if you use their network of ATMs, but otherwise charge you a few dollars per transaction. As for whether it's better, maybe? It's certainly worse than a no-fee banking account at a local credit union (but with limited ATM access) or a big bank (but with a fee and/or minimum deposit requirements), but it's better than holding a wad of cash on your body.
California requires that whatever an employer pays you with be convertible to cash without paying a fee, but it doesn't appear to require that you be able to do so incrementally. As such it appears that you could still be forced to choose between transaction fees and cashing it all in one shot.
A further problem I found was being limited by the denominations the ATM gave out. Sure 20's only works in most cases, but when I'm trying to stretch my check and have to leave $17 of my $217 in there, it hurts.
Getting to a teller window when they were open, or searching down an ATM that gave out 10's just wasn't in the cards considering my schedule at the time.
Which, of course, is predicated on having the appropriate documentation for opening and maintaining a bank account. In most states (although not NY), that means a federally valid ID.
I’ve also reviewed some of these accounts and payroll apps, and many are downright predatory: extraordinary fees for a no-frills debit account, tie-ins to payday loan companies, and connections to “micro investing” (read: gambling) are rampant.
I feel like at this point people are just trying to come up with problems for the sake of it.
Debit cards have pins. You can't just steal someone's debit card and go drain all the money. Sure there are other really hard issues to solve with homelessness. But their debit card getting stolen isn't one of them.
My debit card has a contactless pad. I think there’s a transaction limit on it of a few hundred dollars, but someone could very easily tap it and drain my account if that was all I had.
But even that misses the point: not everybody has the means to wait 5-7 days for their bank to mail them a replacement card, even if no money is actually taken from the account. This is compounded when you consider that most of the companies that offer cheap banking accounts don’t have great branch service.
