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Banking

What Is a Payroll Card?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Who doesn’t like payday? Your employer hands over your wages in the form of a paycheck or directly deposits funds right into your bank account. For more and more workers, however, payday means getting money on a payroll card. Payroll cards are a type of prepaid debit card provided by employers in lieu of a paycheck or a direct deposit.

According to a 2017 report from the Aite Group, a research and advisory firm, an estimated 6.4 million payroll cards will be in use by the end of 2019. The Aite Group estimates that number will increase to 8.4 million by the end of 2022.

Below, we’ll discuss how payroll cards work, identify a few things to watch out for, and answer some frequently asked questions.

How do payroll cards work?

Employees use payroll cards to withdraw their earnings at ATMs and make purchases anywhere that the card network — e.g. Visa or Mastercard — is accepted. Some cards even offer the option to sign up for online bill payments. But employees who are offered these cards may face an array of fees to access their pay, plus other potential pitfalls.

For employers, printing and sending checks can be expensive and cumbersome. Direct deposits are one way for an employer to avoid the costs associated with physical paychecks, but it’s not a viable option for employees who lack bank accounts.

A 2017 survey from the Federal Deposit Insurance Corporation (FDIC) found that approximately 8.4 million households don’t have a bank account at an FDIC-backed institution.

“There are lots of people who are unbanked or underbanked but still have jobs,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling. “If they get a paper check, they have to go to a check-cashing company that is likely to charge a very high fee.”

Payroll cards can be a great way for employers to pay unbanked or underbanked employees, giving them access to their money without the expense of visiting a check cashing firm. However, these cards are not always free of fees and complications.

What are the problems with payroll cards?

Before you agree to sign up for a payroll card, make sure you read the terms and conditions closely and understand how the card works, what fees you’ll have to pay and which usage-based fees may apply. Benefits, drawbacks and fees can vary depending on the card provider. Here are a few things to look out for:

There may be fees to access your pay

New consumer protections and disclosures for prepaid cards and payroll cards went into effect on April 1, 2019. The rules include a requirement to provide a clear chart of common fees to users before they sign up for a card. This should give users a clear, simple fee chart to help them comparison shop and understand what fees they may face when using their payroll card.

Taking the E1 Visa® Payroll Card as an example, here are some of the fees that payroll cards might charge:

E1 Visa® Payroll Card Fees

Monthly Maintenance Fee:

$2.95 in months when there is no payroll deposit on the card; no fee in a month when there is a payroll deposit.

ATM Cash Withdrawal MoneyPass Network Fee:

$1.50; Users get one no-charge withdrawal transaction per month

ATM Cash Withdrawal Non-MoneyPass Network Fee:

$2.50

ATM Cash Withdrawal Foreign Fee:

$3.50

ATM Balance Inquiry Fee:

$0.50

ATM Decline Domestic Fee:

$0.50

ATM Decline Foreign Fee:

$3.00

Funds Transfer Fee:

$2.00

Paper Statement Fee:

$2.00 (per monthly paper statement requested)

Lost/Stolen Card Replacement Fee:

$10.00

Express Delivery Fee:

$40.00

Account Closure Fee:

$15.00

Currency Conversion Fee

3% per transaction

Source: E1 Visa® Payroll Card

Looking more closely at this fee schedule, it’s clear you can avoid some of the fees by being conscious of how you use the card. The monthly maintenance fee is waived in months when there are deposits on the card from your employer(s), and you get one free ATM withdrawal per month. However, besides the single free ATM withdrawal, it’s difficult to avoid paying fees to access your money, and the account closure fee is high and unavoidable.

Not all cards offer the same features

The payroll card your employer offers may not be a great fit with your financial habits or your normal routine. For example, these cards may be part of large ATM networks and may offer free withdrawals from in-network ATMs. However, like with the E1 Visa card above, there may still be a charge for in-network withdrawals. If there aren’t in-network ATMs nearby, you could wind up regularly paying higher out-of-network withdrawal fees.

Some cards offer additional ways to access your money without fees, such as getting cash back when you make a purchase or offering paper checks that are tied to the account.

Another potential drawback is that these accounts may limit how much money you can keep in the account, and how much you can withdraw or transfer each day.

Holds may be placed on your account for certain purchases

Certain transaction types can trigger a payment hold could be put on funds in your account when you’re using your card for purchases. For example, if you use the card at a gas station, additional funds in your account might be put on hold and it could take several days for the transaction to finalize and the funds to be released. This could mean an extra $100 that’s in your account won’t be available for the following week.

It’s not a stepping stone toward a checking or savings account

“In some ways, [a payroll card] could be working to the detriment of some employees because it’s keeping them from seriously considering opening a checking account at a bank or credit union,” says McClary. “The money isn’t working for you.”

Conventional checking accounts lack many of the small fees that can make a payroll card a bad deal. Additionally, conventional banking options include savings accounts with higher interest rates.

If you need to use this type of card, you may have trouble opening a checking or savings account due to a negative bad banking history — perhaps you bounced a few checks or closed an account that had a negative balance. Remember, many financial institutions offer second chance bank accounts, so don’t let a bad payroll card deal prevent you from pursuing a regular banking account. McClary adds that, “there are programs available in every state to help people open a checking or savings account.”

Pros and cons of payroll cards

Pros

  • Quickly and electronically receive your pay, avoid check-cashing fees and keep your money in a secure account rather than having to worry about carrying cash.
  • Many cards offer free bill pay services, which can make it easier and cheaper to pay your bills versus using money orders or cashiers’ checks.
  • You can manage your money online or with a mobile app (if the card company offers one).

Cons

  • Payroll cards charge fees that can be difficult or impossible to avoid.
  • Very often you have no choice over which payroll card the company will offer.
  • The card might have a maximum daily withdrawal or transfer limits.
  • You won’t earn interest on your money and it may be more tempting to spend money when you don’t separate your savings.

FAQ on payroll cards

State laws may require your employer to give you free access to some or all of your wages at least once each pay period if you use a payroll card. Depending on where you live and the program, your card could waive the first ATM-transaction fee or give you an alternative way to access your wages for free, such as a check that’s linked to the account.

No, you do not. Employers must give you at least one alternative to using a payroll card. However, this alternative could be a direct deposit (rather than a paper check), which isn’t especially helpful for unbanked employees.

If you don’t like the company’s card offering and don’t want or can’t get a bank account, you could sign up for an alternative prepaid debit card on your own — check out our top picks. You may then be able to sign up to have your pay directly deposited onto the card you chose rather than one your employer picked.

Some cards may offer this feature, but others do not. Review the terms of your employer’s program to see if this is an option.

Some cards will let you get cash back when making a purchase, which could be a convenient and free way to get cash from your account.

There’s no credit check or requirement to get or use a payroll card.

Some cards come with zero liability coverage from the card networks, like Visa or Mastercard. Even without that level of protection, you’ll have the same protections as you would with a debit card. You won’t be liable for any transactions after you report your card lost or stolen and you’re limited to $50 of liability for charges that already occurred if you report the card lost or stolen within 48 hours.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Louis DeNicola
Louis DeNicola |

Louis DeNicola is a writer at MagnifyMoney. You can email Louis at [email protected]

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Banking

Blast App Review: Grow Your Savings By Playing Games

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

If you’ve been reading about the gig economy and side hustles, you’ve probably heard more than a few times about monetizing your hobbies. Whether it’s selling your crochet masterpieces on Etsy or hopping around the city with TaskRabbit, side hustles work best when you turn your personal interests into money-making ventures.

For gamers in search of a side hustle, the Blast app is here to help. Blast pays you to play Android games, such as Words with Friends and Diner Dash, on its app. Don’t expect to rake in the big bucks, however, as you’ll likely only earn a few cents each time you play. For a few high scorers, your shot at the big money is getting your name on the competitive leaderboard.

Blast also includes a high-yield savings account to store and grow your earnings at 2% APY. While this is certainly an added perk to a fun gaming app, it’s not made for serious savings. The account imposes low limits on your deposit and withdrawal capabilities, keeping the account confined to the app’s earnings.

Blast features

Via blast.com
  • An extensive list of games and Missions (more below) from which to choose
  • The chance to earn bonus cash by topping leaderboards
  • A high-yield savings account
  • Further automatic savings opportunity through Game-Based Savings

Blast offers a variety of games to play, from “casual to hardcore,” as it puts it. Everybody should be able to find a game that suits their tastes. You can see your options right from the app’s homepage, clocking each game’s earning potential at a glance.

Each game has a set of Missions, or objectives, to complete, such as completing the game’s tutorial or passing a difficult level. You earn your cash rewards, or Mission Rewards, by completing these Missions. Cash rewards aren’t huge, paying out between 5 cents and a few dollars, depending on the Mission. For example, completing the tutorial of an “Easy” game can rake in 25 cents, while beating level 10 in a “Hard” game could reward you with $5.

Missions change periodically, so be sure to check back in to find new ones you haven’t tackled yet.

The chance to earn more than a few cents comes with ranking on the leaderboard. You can do this by collecting eXperience Points, or XP, for every dollar you earn or by completing certain Missions. Each week, a new leaderboard winner is chosen. Each winner is rewarded with an extra $50. Those ranked lower can still win a bit of extra prize money, too, depending on how high up the board they land.

Blast savings account

To take your savings a little further, all the money you earn through Blast Missions is deposited into a Blast account that earns at 2% APY.

While this is a relatively competitive rate, paired with the minimal earnings you get from Missions, it doesn’t yield much savings. Say you start with 50 cents for completing a Mission or two and each month you earn $1 more. In five months, your total savings would equal a whopping $5.53.

You can take a bit more advantage of the APY by setting up recurring deposits, either weekly or monthly, from a linked external checking account. However, even here, Blast limits your savings abilities. The minimum daily deposit amount is $5, while the maximum is only $50. This doesn’t offer much ease or convenience if you’re trying to move around bigger sums of money.

Further, all deposits cannot exceed a combined daily maximum of $100. This includes any recurring deposits and deposits from Blast’s Game-Based Savings feature. This optional feature allows you to save 1 cent for every minute you spend playing any Blast game on your Android. This isn’t a cash reward paid by Blast, though. The money comes out of your personal checking account. You have to earn at least $5 for a Game-Based Savings transaction to go through — which equals more than eight hours of gameplay. However, transfers cannot exceed $10 in a seven-day period. All Blast transfers take one to two business days to fully settle.

You can also transfer money from your Blast savings account to a linked checking account or PayPal account. The minimum daily withdrawal amount is $5. Transfers out of a Blast account will take four to six business days.

Blast fees and fine print

It’s pretty free to open and use Blast. There are no monthly or annual fees.

The only fee you’ll have to keep an eye out for is the 30 cent PayPal transaction fee when you make transfers from your Blast account into a PayPal account.

There are a few steps you have to successfully complete when using the Blast app to earn your Mission rewards. Once you’ve chosen a Mission, you’ll have to hit the “Connect” button. You have to connect through the Blast app before a Mission expires to be eligible to receive Mission rewards. You must also start and finish a Mission on the same device for it to count.

Additionally, to earn Mission rewards, you must not have previously installed or played the game on your device outside of the Blast app.

You can use Blast with almost every game in the Google Play Store, offering the chance to earn just by having an Android. Compatibility with the Apple App Store, Steam and other PC and console titles is not yet available, but it is planned in the future.

As for security, Blast doesn’t play around, implementing bank-level security — provided by Plaid — and maximum FDIC — through a Wells Fargo For the Benefit Of (FBO) account — insurance for a fun and secure experience.

Opening a Blast app account

Blast is only available for Android users. You can sign up online to be placed on the iOS waitlist.

You can find the Blast app in the Google Play Store. To create an account, you’ll need to provide your email. You don’t need to link an external checking account right away, but you’ll need to eventually if you want to transfer your Blast rewards out.

Now, you’re ready to play — and earn.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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Banking

Honeyfi App Review: Money-Tracking Tool for Couples

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Money can be a significant source of stress in a marriage. In a 2017 MagnifyMoney survey, 21% of respondents cited money as the cause of their divorce. According to that survey, 70% of respondents didn’t stick to a budget while married.Creating a budget together and actively working to live within it may help reduce some of the financial tension that can build up in a marriage. There’s no shortage of apps that can help couples learn how to create and stick to a budget.

Honeyfi is one such app that has a unique set of features and benefits. We’ll break down the Honeyfi app, including how much it costs and who should use it.

What is Honeyfi?

This app targets the savings and budgeting needs of couples. It’s intended to help couples save for specific goals, such as a vacation or a new home.

The app integrates the social media features of other financial apps like Venmo by allowing users to add comments to transactions or tag transactions to specific people. The app aims to make budgeting simple by allowing users to track spending in an easy-to-use format.

How does Honeyfi work?

Before you can begin using this app, you’ll need to download it from the Apple Store or Google Play. You can click either link or click on the “Get the app” button at the top of the website, in which case you’ll get a text to your phone to download the app.

Once you’ve downloaded it, you’ll need to set up an account. After providing information on you and your partner, including your names and email addresses, the app will ask you to link your bank accounts. The app can link to more than 10,000 U.S. financial institutions.

Via Honeyfi app

The app uses Plaid, a financial technology company, to securely establish a link to your bank accounts.

Via Honeyfi app

To link your external accounts, you’ll have to provide the login information you use for your bank. For example, if you want to link your Chase account, you’ll see the following screen:

Via Honeyfi app

The app doesn’t store usernames or passwords on its servers, according to a customer service representative.

Once your information is verified, the app will download your banking transactions and set up your account. The app reviews your transactions and suggests a household budget. You can scroll through the app to see the different budget categories suggested, which you can edit at any point.

Via Honeyfi app

The Goals program helps users save for specific goals in an account that’s FDIC-insured up to the maximum $250,000. Savings transfers can be automated, and funds can be withdrawn anytime without a fee. You earn interest, too, which we’ll break down later.

The app’s functionality is based on the data it downloads from your banking transactions. Using this information, the app allows you to:

  • Track banking transactions
  • Sync your credit cards, loans and investments (besides your bank accounts)
  • Create custom budget categories
  • Split transactions and assign them to multiple categories
  • View transactions across multiple accounts
  • Comment and react to specific transactions with your partner

You should know that you can limit the transactions you share with your partner. This can be done at the account or individual level. You can also unlink your bank account.

How much does Honeyfi cost?

The app, which initially was free, charges a $5.99 monthly subscription fee. You also can choose to pay $59.99 annually after a 30-day free trial period.

A company representative said it started charging for the app to keep the business sustainable without having to bombard users with ads. This partially answers the question of how the company earns money from the app, but not entirely.

The company does suggest certain products within the app, such as life insurance, if it determines that users may need them, according to a company representative. So while the company’s main source of revenue might not be from ads, you should expect to periodically see suggestions for certain companies or products.

The company also makes money by keeping some of the interest that you might otherwise earn through its Goals program. When you set a savings goal, the company invests that money for you with a partner bank, according to a company representative. Although it rewards you with a 1% Savings Bonus annually, it reserves the right to any interest that is earned on those deposits. In other words, if the company invests your money in an account earning 2% annually, it may pay you the 1% bonus and keep the additional 1%.

The company pledges to never sell the personally identifiable information of its customers, according to a representative.

Who should use Honeyfi?

This app is designed to work with couples. The idea is to allow couples to share transactions in a single location while being able to comment and react to these transactions in an entertaining way.

Although you don’t have to be a married couple to use the app, it’s designed for people that have a complete level of financial trust. If you sign up with your significant other and you aren’t married, you have to be comfortable sharing all the details of your financial life with one another.

Although the concepts of budgeting, saving and investing are applicable to single people as well, this app is tailor-made for couples. In fact, during the sign-up process, the app requires you to enter the name of your partner. If you want to test out the app but you don’t have a significant other, the company suggests filling in a name and using another personal email address.

Is Honeyfi safe to use?

The customer encrypts all personal information that customers provide, and it doesn’t store any banking credentials, according to a company representative. However, the app does rely on Plaid to encrypt and protect the banking credentials that customers provide.

Plaid uses the following security measures, among others:

  • Role-based access controls at each level of infrastructure
  • Multifactor authentication
  • Internal and external network penetration testing
  • Third-party code reviews
  • Communications transfer over encrypted tunnels

These layers of protection all work to keep your sensitive financial information safe.

What are the pros and cons of Honeyfi?

Pros

  • User-friendly interface
  • Ability to track all financial transactions in a single location
  • Social media aspect helps keep users engaged
  • Flexible budgeting controls
  • Ability to automate savings

Cons

  • Annual fee
  • Can earn more money in an online savings account than in the Goals program
  • Must sign up as a couple
  • Budgets are based on past cash flows; may not be effective for those with variable income
  • Occasional ads for third-party services or products

How does Honeyfi stack up to the competition?

Honeyfi is not the only option when it comes to finance apps for couples. Honeydue, Zeta and Twine apps share similarities with Honeyfi but go about the process slightly differently.

Honeydue tracks cash flows much like Honeyfi, and it includes the ability to comment on your partner’s transactions. Both apps also create household budgets for users and allow you to choose which information you share. Honeydue, which has a sleek interface, shows your calendar of bills that are due and creates reminders.

Zeta supports more than 10,000 U.S. financial institutions. It tracks cash flows similar to Honeyfi and Honeydue. Zeta offers communications options on financial transactions and the ability to split certain bills. It also offers a goals page.

Twine is a couples app developed by John Hancock Personal Financial Services that emphasizes the savings and investment aspect of a couple’s budget. You can use Twine to set savings and investment goals, and track your progress mutually. Along the way, you’ll receive recommendations and tips regarding your savings goals. Twine charges a monthly fee of 25 cents for every $500 that you invest.

While Twine is a bit different than the other couples budgeting apps, Honeyfi, Honeydue and Zeta all share similar basic features. However, at the present time, Honeyfi and Twine are the only apps that charge a monthly fee, so you’ll have to factor that into your evaluation of the apps.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

John Csiszar
John Csiszar |

John Csiszar is a writer at MagnifyMoney. You can email John here

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