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Debit cards to replace unemployment checks in Indiana

Summary

The state of Indiana has replaced its unemployment checks with prepaid Visa debit cards.

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Debit cards are soon to replace unemployment checks for those who are out of work in Indiana, making it one of the first states to use debit cards exclusively for collecting unemployment.

Starting in November 2006, unemployment benefits will be provided through a new Visa card courtesy of the state.  This Visa prepaid debit card issued by Cleveland’s National City Bank can be used at stores, ATM machines and banks to collect unemployment benefits.

Recently, those collecting unemployment began getting mailings informing them about how to use the new card.  Information on its use is also available via the Indiana Department of Workforce Development’s online unemployment claims filing center.

According to a spokesman for the Indiana Department of Workforce Development, the first debit cards should go out in mid-November.  Once the system is fully functional, unemployment checks, currently mailed each week to the unemployed person’s home, will be history.

The debit card comes with a schedule of nine separate fees.  These charges run the gamut from withdrawals at bank teller windows to international transactions, with the steepest fee of $15 charged for expedited card delivery.

However, the department spokesman explained that smart users will never have to pay any fees, since they will get one free withdrawal with every deposit, generally each week, at any participating bank ATM or a Visa Member bank teller window. He added that about 95 percent of Indiana banks are Visa member banks.

A fee of $1.25 will be levied for each withdrawal following the initial free withdrawal.  Unused free withdrawals will build up and can be used in the following weeks.  Unemployment recipients have 600 ATM machines at which they can make their one free withdrawal per deposit.

And, just like a bank debit card, the unemployment debit card can be used to make purchases at stores that take Visa.  Numerous merchants will also offer the chance to get cash back with a purchase.

The Indiana Department of Workforce Development expects the new system to save the state $1.8 million per year.

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