I don't have a bank account and so my employer pays me with a prepaid debit card. I keep incurring fees left and right and it's cutting into my budget. What can I do to keep my fees low or get paid some way that doesn't cost me an arm and a leg?Sincerely,
Nickel N. DimeDear Nickel,
You'll find you're not alone. The practice of paying employees with prepaid debit cards is catching on at retailers like Wal-Mart, Taco Bell, and other companies that deal in high turnover employees like call centers. Many of these companies have discovered cards are cheaper for them than checks. Except, as the New York Times showed recently, this isn't always the best for employees. Still there are ways you can protect yourself.
Interviews aren't just auditions. They're a chance for you to get to know the company you want to work for. In addition to all of the other questions you should be asking, find out during your interview how the company plans to pay you and what kind of fee structure prepaid cards will have if you absolutely must use them. Some companies may charge a fee to withdraw money even within their own stores while others do not. You may also find certain cards have a network of ATMs you can withdraw money at without fees.You can also ask once you're already employed. One of the shadier tactics that some of employers have (allegedly) employed is pitching prepaid cards first and foremost instead of offering direct deposit options upfront. Most companies will still offer an option to either be paid by check or direct deposit if you ask.It's also worth finding out which ways an employer is legally required to pay you with. Wage laws can vary widely by state but some places may require a company to offer certain options including cash. You can check this resource to get started figuring out your state's payment laws, but as with any legal advice online, be sure to do extra research before walking into your employer demanding cash because the internet told you they have to.There are plenty of reasons to not have a bank. Maybe the fees are too cumbersome. Maybe you had some financial problems in your past and your bank application was rejected. Things happen. However, just because you can't or won't sign up with a bank doesn't mean you're out of options.Credit unions are a great alternative to banks if you want to avoid fees. Each one only services certain groups of people (teachers, military, residents of a certain area), but there are so many available, most people can find one in their area that they may qualify for. While banks may charge a monthly fee or have a high minimum balance, often credit unions can provide free checking and savings accounts, or at least accounts with very low required balances to avoid fees. For reference, roughly 70% of credit unions offer free checking accounts, versus 39% of banks.You may also look into alternative banking solutions like online banks such as Simple. These may have the same hurdles if you have a rough financial past as a regular bank (they're both typically backed by the same for-profit corporation model after all). Still, if you chose not to get a typical bank either on principle or due to overwhelming fees, alternative financial institutions can offer attractive options.Ultimately, if you're losing a significant amount of money to fees just to get access to your money and you can't get around it, you need to make more money. Some employees have found themselves making less than minimum wage in spendable income. If you're hit with a lot of fees and are stuck on a tight budget, go over your finances to see whether you can feasibly sustain your job at your current rate of pay.If you find that the fees are unavoidable and are digging too deeply into your paycheck, you have a few options. Your first stop should be to talk to your boss and explain you feel you are underpaid. Be sure to bring all the information you can and prepare for the talk before you walk into your boss's office.If you can't get a raise, it may be time to look elsewhere. Even if you don't move up to a better paying job, finding a position that pays the same amount via a better method could still save you money. Start looking before you leave your job first, of course, but don't let the routine of having a job stop you from finding something. Keep your job search secret if you have to, but do it. If your finances are hit enough by fees to make you read this far, it's probably a big enough problem to justify looking for greener pastures.It may not be possible to always avoid fees when dealing with getting paid. Some way or another financial institutions have to get paid. However, if you're living at the margin and payday is feeling like death by a thousand paper cuts, talk to your employer about some way to get paid that doesn't cut into your budget so much. If they won't work with you, it may be time to find one that will.Sincerely,LifehackerPhotos by bpsusf, Retailmania, and Robert S. Donovan.
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