Unemployed in Alaska to receive debit cards

Posted: Sunday, February 22, 2009

JUNEAU - People laid off from jobs in Alaska will have the option of accessing unemployment benefits through debit cards under a program expected to be launched in May.

The state has entered into an agreement with JPMorgan Chase to begin issuing cards to phase out paper checks that state officials say are costly to print.

Users could be stuck paying bank fees, depending on where they use the card, but Tom Nelson, director of the state's employment security division, said the cards would allow recipients to access their benefits more quickly while saving money for the state.

"It is very costly to print checks these days," Nelson said. "It is burdensome.

"A debit card is so easy," he said. "It's the next best thing to a direct deposit."

About a third of recipients already receive payments through direct deposit. That program will continue, Nelson said.

So will paper checks for residents of rural villages where there are no automated teller machines or stores equipped to handle debit card transactions.

Debit cards may be used at ATMS to obtain cash or at a store to buy goods. Under the agreement with JPMorgan, card bearers would be allowed two free withdrawals per month at ATM machines associated with JPMorgan banks or the Allpoint network. They would have to pay a $1.50 fee for each subsequent withdrawal.

Debit card users also would be assessed a surcharge if they use a bank outside the Allpoint network.

Card bearers do not pay a surcharge when using a debit card at a store to buy goods or receive cash.

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