Government-Issued Debit Cards Can Cost The Unemployed07:12
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More than 40 states issue prepaid debit cards for $53 billion in unemployment benefits and child support. But in many cases, banks are charging fees when the cards are used. (AP)
More than 40 states issue prepaid debit cards for $53 billion in unemployment benefits and child support. But in many cases, banks are charging fees when the cards are used. (AP)

At least 40 states issue more than $53 billion in unemployment benefits and child support on pre-paid debit cards. These are just like regular debit cards, but they're preloaded with cash. It's cheaper for state agencies than issuing checks and seems more convenient for recipients. Except for all the fees. Withdrawing cash or checking balances can cost the user money. They can even be charged a fee for not using the card quickly enough.

The recent financial-overhaul law cracked down on fees that banks can charge credit card users. But prepaid debit cards weren't included in the bill. And now banks are trying to recoup billions of dollars in lost revenue on credit card fees, by racking up additional charges on prepaid debit cards. Suzanne Martindale of the Consumer Union explains how the fees work.

This segment aired on May 25, 2011.

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