If my employer offers me a payroll card, do I have to accept it?

Some employers will give you a choice between direct deposit to a payroll card, direct deposit into your bank account, or a paper check. Others may only give you a choice between a direct deposit to your own bank account or a prepaid card you choose, or a payroll card. State law determines what choices your employer has to offer to you, or if your employer must obtain your written consent before paying you with a payroll card.

Your employer or the card issuer must provide you with the card’s terms and conditions. Before you agree to receive your wages on a payroll card, make sure you understand those terms and fees. For example, some cards charge fees for out-of-network ATM withdrawals, receiving paper statements, or checking your account balance at an ATM. Some cards charge fees every time you make a purchase.

The CFPB’s prepaid rule, which came into effect April 1, 2019, requires providers to give you certain disclosures before you choose to be paid through a payroll card. However, due to phase-in rules, it may take some time before you start seeing the required disclosures. The disclosures include a “short form” that includes key fees and other important information and a “long form” that includes all fees and other information about the card.

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You should be careful to check all the fees that may apply when you use your payroll card. Compare the payroll card to a prepaid card of your choice and also to a traditional bank account to see which is better for you.  If you start using a payroll card and you don’t like it, you can ask your employer to switch you to another option.