Benefits which are not beneficial

[img_assist|nid=7691|title=|desc=|link=none|align=left|width=100|height=67]In Colorado the Department of Labor and Employment is going to save the state money spent for printing and mailing paper checks for unemployment insurance benefits and the amount saved are said to make up $250,000 a year.

Instead of paper checks given to unemployed residents the state will use debit card payment. But some people find this movement to be very inconvenient and, what is more, very unprofitable for unemployed recipients. The fees for transactions with such cards may exceed the money to be saved by the state.

"You have to have a degree to figure how to get your money out of the card without a fee," said Sandi Yangas, an unemployed Aurora resident anxious about the new system.

The system loads benefits on debit cards and then card holders may use them to purchase right from the merchants' stores or go to ATM.

However collecting the benefits may come to $8.33 in fees for 30,000 people using the cards each month.

The system for Colorado is provided by JP Morgan Chase & Co., which runs similar electronic-benefit-payment programs in New York, Rhode Island and Texas.

The income of Chase comes from fees and interest. Under this program the state is not to end up loosing but careless recipients are, as they will pay transaction fees which may be very high.

"If the net result is more expensive to the consumer, then that is a concern. However, it may not be," said Renee Beauregard, executive director of the Consumers United Association in Arvada.

Consider this. The number of free visits to a bank teller is 1. Other visits above that one are to cost $5 each. At Chase ATMs card's funds are accessed free and unlimited. Cardholders may also make one free withdrawal at an out-of-network ATM per deposit, which happens every two weeks. But Chase charges $1.50 to access an outside ATM, and most host networks charge their own fees of $2 or more. Unemployed recipients get $330 per week, or $660 per deposit on average as per Mike Cullen, unemployment insurance director with the department. At most ATMs people may withdraw only the sum that doesn't exceed $400 per transaction which implies that recipient will have to make more than one visit to get money off the card. Chase ATMs are able to give out $800 in a transaction, said spokesman John Murray. If you want to check an account at a non-Chase ATM you will be charged 50 cents. PIN usage when making a purchase with the card means that you should pay 10 cents. Two signature purchases - where the debit card is used as a credit card - are allowed free per month. More will cost 10 cents each. Drafting a check costs $12.50.

"Who benefits?" Yangas asked. "Not us."