MOBILE, Ala. (WALA) – Some people are getting their latest stimulus payments on prepaid debit cards, but if recipients are not careful, they could lose part of that money to fees.  

Tax prepayers, like Charles Harris have some simple advice for people getting federal payments on a plastic card: Read the fine print. 

“My advice to them is to please know that there are always fees on debit cards,” said Harris, owner of Associated Bookkeeping and Tax Service in Mobile. “This is the way these companies make money. And those fees are quite minimal, so I think they can trust those products.”

After Congress authorized the new round of coronavirus relief payments in December, the federal government sent most of the money electronically to people’s bank accounts. But others have received – or soon will receive it – via check or debit card.  

The government contracts with a company called MetaBank to issue the debit cards. If a recipient uses that card to get money from an out-of-network automated teller machine, he or she will pay $2, although MetaBank will waive it the first time. Even checking a balance on an out-of-network ATM costs 25 cents.

If you happen to get money from an ATM while out of the country, it will cost $3. And you face $5 if you use the card to make a withdrawal from a bank teller inside a bank, although the bank also waives that the first time.

Brad Martin, Volunteer Income Tax Assistance program coordinator at the United Way of Southwest Alabama, said MetaBank fees are not the only ones to worry about. 

“Your bank may also charge fees, and so it’s good to ask those questions before doing anything,” he said. “You can check your balance online, you can transfer the money to your own account, and you can use it as a spending card, as a debit card.”

Experts said the smartest play is for a stimulus recipient to transfer the money into his own bank account. If you someone does not have one, he can use the card to buy goods and services without a fee at most retailers. 

If a stimulus card holder has to use an ATM, he can check online to see if he will be zapped with a fee. That site also gives locations of places where people can cash checks without frees. People can write checks off of money on stimulus cards by calling the customer service number and asking for Money Network checks to be mailed to them.

Tax filing season is coming up, and this will be an important one for many. Folks who did not get one of their stimulus payments – or did not receive the correct amount – will be able to claim the additional money when they file income tax returns this year.

“The way you get it back is you file out 2020 tax return, even if you don’t normally file a tax return,” Martin said.

All content © 2021, WALA; Mobile, AL. (A Meredith Corporation Station). All Rights Reserved.

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