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Paper checks going the way of the dinosaur for SSDI recipients

If you are one of about 179,000 people in Michigan who receive Social Security checks by paper check, you have a decision to make. Paper Social Security checks are being phased out by next spring, to be replaced by either direct deposit to a bank account or having the money deposited electronically onto a debit card.

Recipients of benefits, including those on Social Security Disability, will have the choice as to which they prefer, but in about seven months, they will no longer have the option to receive a paper check. Only a small group of retirees over 90 years old will be able to receive their benefits by check if they desire. According to proponents of the debit card, its acceptance is strong; most people surveyed said that they are satisfied with the card, and 93 percent say they would recommend it to someone else.

If benefit recipients choose the government debit card option, they should be aware of hidden costs and fees that they could potentially be charged for using the card.Although the card has fewer fees than traditional debit cards, it is not without its own costs. The card offers just one free ATM withdrawal a month, after which each additional withdrawal costs 90 cents.

To use the one free ATM withdrawal, the recipient must use one of the 60,000 ATMs in the network. If the ATM is not in network, it could cost as much as $3 per withdrawal to use the debit card. Receiving benefits via direct deposit to one's own bank account, however, has no extra fees associated.

Source: Detroit Free Press, "As Social Security benefits go paperless, beware debit card fees," July 22, 2012

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