What Are Pay Cards?

Have you ever worked for an employer who offered to pay you with a pay card instead of a paycheck? If you’ve never had this experience, you might not know what a pay card is. It’s one form of receiving payment, but it’s not always the best choice. 

If an employer offers to pay you with a card, they are most likely referring to a pay card. These are also known as payroll cards. If you agree, your employer will directly deposit your wages onto the card, rather than sending them to your bank or as a paycheck.

Pay cards work like debit cards. You can use them at retailers, online, and ATMs. If you don’t have a bank account, a pay card can be convenient. Employers sometimes offer pay cards to reduce expenses associated with printing and mailing checks.

But as Credit Karma notes, these types of cards have a few downsides. It’s important to be aware of these drawbacks, such as fees and restrictions limiting how you use your money on it.

What You Should Know Before Agreeing To Pay Cards


Pay cards generally don’t charge monthly fees, but they might have other expenses that can add up fast, such as:


  • Activation
  • ATM withdrawals
  • Inactivity
  • Purchases
  • Customer service
  • Cash reload


As with any financial product, you should read the terms and conditions to understand any extra charges associated with your payroll card fully. The bank issuing the card must disclose any fees before you agree to accept a pay card. 

After you read the fine print, consider which fees you would most likely encounter. For instance, if your card doesn’t reimburse ATM fees, but you routinely use cash, you could get stuck with hefty additional charges.

If you decide against a pay card, your employer is required to give you another option, such as physical checks or direct deposit.

Using Pay Cards

If you receive a payroll card, make sure you know how much money is left and any fees you are paying to use it. Before you decide to sign up for a payroll card, find out what reporting options you have available. For example, does the card come with online monitoring? Or do you have to request written statements personally?

It would help if you also accounted for your preferred ways of managing your finances and how long you intend to work for this particular employer. If you have more than one job or change jobs frequently, you could be stuck juggling multiple payroll cards. Or, you might get hit with transfer fees for rolling funds over between cards. Not only can these costs add up, but they can take up a lot of your valuable time.

Do Pay Cards Charge Overdraft Fees?

Depending on the pay card issuer, you could overspend with your card, leaving you with an expensive overdraft fee. When you read the fine print, check if it comes with overdraft protection — and if it does, see how much the fees cost.

What Happens If Your Pay Card Is Lost Or Stolen?

If this happens to you, contact the bank that gave you the payroll card right away so it can send you a replacement. If you report a lost or stolen pay card in less than two business days of the incident, you’ll only be accountable for $50 for unauthorized charges. If you wait longer than that, your liability might be higher.

No one wants to pay extra for a lost pay card. But, unlike uncashed checks or money, you can get your funds back. Like credit cards, debit cards, and other prepaid accounts, payroll cards offer consumer protections that can help you in an emergency.

Should You Get A Pay Card?

If you’re unsure if a pay card is in your best interest, consider how willing you are to pay potential fees. If this doesn’t concern you, think about how you like to spend your money and how long you plan to stay with your current employer.

Payroll cards might be difficult to manage if you have more than one job or change jobs often. Either way, if you received a pay card from every employer, you may struggle to manage multiple cards. Having your earnings in one account may be a better option. But if you don’t have a checking account, then a pay card is an excellent choice.


  • McQuay, Sean. “What Is a Pay Card and How Does It Work?” Credit Karma, 10 Nov. 2020, www.creditkarma.com/credit-cards/i/what-is-a-pay-card.
Ian Schindler