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Benefits |
Risks |
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Cash
Paper or coin money minted by the U.S. government
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- Can spend it almost anywhere
- Easy to access
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- Could be lost or stolen, especially if you carry large amounts with you or leave it in your home
- Some people find it tempting to spend on a whim, making budgeting and saving more difficult
- Can be more difficult to track spending for personal budgeting and tax purposes
- Not all bill payments can be made in cash
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Paper check
A physical check given to pay you the indicated amount; has to be deposited or cashed to access the money
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- Can be deposited into a checking or savings account, or may be loaded onto a prepaid card directly
- If lost or stolen, usually can be canceled and reissued to you
- Sometimes no fee to cash "on us" checks, which are written from accounts held with the bank or credit union where you're cashing it
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- Have to wait until it arrives in the mail or can be picked up, possibly delaying when you receive the money
- Requires you to take an action of depositing or cashing the check before you can use the money
- May need a bank or credit union account to cash a check without paying a fee
- May not be able to access all the funds immediately after depositing (waiting period for check to clear
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Direct deposit
Money is electronically sent to your bank account, credit union account or your own prepaid card
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- Reduces your risk of loss or theft if funds are sent directly to a bank or credit union account because they're protected form unauthorized transfers and other errors once deposited
- Usually available to you immediately (often on payday)
- No check-cashing or other fees to deposit money
- Many banks and credit unions waive fees for checking or savings accounts when you set up direct deposit
- Funds can usually be accessed in a variety of ways, such as by using a debit card at merchants or at ATMs, at the bank or credit union's branches, through on online bill pay service, or by personal checks
- May be able to split the deposit between checking and savings accounts, which can help you build savings
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- Direct deposits made to a prepaid card may not have protections for unauthorized transfers or other errors, unlike checking and savings accounts
- Can be charged fees if you write checks, used for debt card, or make other transfers without sufficient funds in your account.
- Have to go to an ATM or get cash back at a merchant to receive cash, if there are no convenient branch locations
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Payroll card
Employer loads your salary or wages onto a prearranged prepaid card where you can access the funds
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- More secure than cash or checks
- Has full federal protections in case of unauthorized transfers or other errors (the same as checking and savings accounts)
- Funds can usually be accessed in a variety of ways, such as using the card at merchants or at ATMs, at the card provider's branches, through an online bill pay service and sometimes by check
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- Potential service or inactivity fees, meaning you might have to pay to access your wages in certain ways (ask your employer about these)
- Have to go to an ATM or get cash back at a merchant to receive cash, if there are no convenient branch locations
- Some cards limit how many times you can access an ATM in 24 hours
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Government benefits card
A government agency loads your benefits onto a prearranged prepaid card where you can access the funds
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- More secure than cash or checks
- Has full federal consumer protections in case of unauthorized transfers or other errors (includes needs-tested programs administered by the federal government, like SSI)
- Funds can usually be accessed in a variety of ways, such as by using the card at merchants or at ATMs, and possibly through an online bill pay service
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- Potential service or inactivity fees, meaning you might have to pay to access your benefits in certain ways (read the cardholder agreement to check for these)
- If cash access is permitted, have to go to an ATM or get cash back at a merchant to receive cash
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Electronic benefits transfer (EBT) cards
A certain type of government card (replacing paper-based benefits used for needs-based programs such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and other programs (availability, fees and other terms vary by state and program)
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- More secure than cash or checks
- For some EBT cards, funds can usually be accessed in a variety of ways, such as using the card at merchants or at ATMs, and possibly through an online bill pay service
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- There may be limits on where you can use the card or what you can purchase with it
- May not have protections for returning funds taken through unauthorized transactions or other errors
- If cash access is permitted, have to go to an ATM or get cash back at a merchant to receive cash
- Some benefits can expire if they aren't used within a certain amount of time (ask if this applies to your benefit and keep track of your balance to avoid losing benefits); ask to have cash benefits sent to your bank account or your own prepaid card instead to avoid this
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