Social Security Sent Me A Direct Express Card, What Is It?

Social Security is in the process of making all payment processing electronic, they are eliminating the issuing of checks. As of May 2011 if you are awarded Social Security benefits (either SSD or SSI), you must receive your monthly benefit electronically.

Social Security has stated that "You must switch to electronic payments by March 1, 2013. If you don't, the U.S. Department of the Treasury may send your benefits via the Direct Express® card program to avoid an interruption in payment." We are quite some time away from 2013, but I have already had clients who have begun receiving the Direct Express card.

If you want to avoid receiving the Direct Express card then you should set up direct deposit through your bank account. Obviously this is an issue if you don't have a bank account.

According to Social Security:

The Direct Express card is a debit card you can use to access your benefits. And you don't need a bank account.

With the Direct Express card program, we deposit your federal benefit payment directly into your card account. Your monthly benefits will be available on your payment day—on time, every time. You can use the card to make purchases, pay bills or get cash at thousands of locations. And most transactions are free.

The Direct Express card is both safer and more convenient than paper checks. Anyone receiving Social Security or Supplemental Security Income payments can enroll. No more waiting for the mail or worrying about lost or stolen checks.

Similar to a debit card that a bank issues customers, your Direct Express card has a PIN number. In order to use the card you will have to enter the PIN number, this prevents someone else from using your card if it is lost or stolen.

Despite the convenience this Direct Express card seems to offer, I strongly recommend setting up Direct Deposit through a bank. Despite the advantages the card seems to offer, there are many surcharges associated with the card; to withdraw cash at an ATM, to transfer funds to a bank account, to replace lost cards, monthly paper statements and international usage.

For additional information, review the Frequently Asked Questions page on the Direct Express website.