No Stimulus Check Yet? You Might Get A Prepaid Debit Card Instead

Since mid-April, when the first stimulus checks guaranteed by the CARES Act were sent out, roughly 140 million Americans have received their stimulus payment. The first wave of people to receive the money — up to $1,200 for an individual — did so through direct deposit, because their bank account information was already on file with the IRS through the past tax returns they had filed. Everyone else, we thought, would be receiving their stimulus payment via a paper check. With the IRS’ Get My Payment tool, you can track the status of your stimulus (including what method is being used and, if you’re getting a check, when it was mailed out) — as long as you can input your information without errors, which were common especially in the early days after the tool was first rolled out.

But last week, the IRS revealed that some Americans would be receiving their stimulus as a prepaid debit card. While this wasn't originally shared as a potential option, some 4 million prepaid debit cards have been mailed as of now. The prepaid card is a Visa issued by MetaBank, which handles all cards issued through the U.S. Debit Card program.

The prepaid debit card will only be sent to people whose bank account information is not on file with the IRS (the deadline to submit it was in mid-May) and whose tax return was processed by either the IRS center in Andover, Massachusetts, or the one in Austin, Texas. The Andover branch processes returns from Maine, Maryland, Massachusetts, New Hampshire, and Vermont; the Austin branch processes returns from Florida, Louisiana, Mississippi, Oklahoma, and Texas. If you had a foreign address on the last tax return you filed, it was also processed by the Austin, Texas, center. According to the IRS, you cannot request that you receive a prepaid debit card instead of a paper check. But you might be able to direct your payment to a prepaid debit card of your choice, if your stimulus payment hasn’t been scheduled to go out already.

There are several pros of the IRS using prepaid debit cards for stimulus payments. It’s expected to be faster than cutting and mailing paper checks to the remaining millions of Americans still waiting for their stimulus. It can also help Americans who don’t have bank accounts. Unlike a paper check, all of your stimulus payment will be available to use as soon as you receive it. Since it’s a Visa, you can use it for online purchases or use it at any store that accepts Visa. You can even transfer the funds to a bank account without being charged a fee. There are also a few special perks of the stimulus prepaid debit card that might not be true for most other prepaid cards: If you want to withdraw cash, the ATM surcharge is waived the first time. After that, if you want to avoid fees, you’ll need to use this locator to see which ATMs have no surcharges.

There are also some undeniable cons of getting a prepaid debit card. You might worry about how easy it would be for it to get lost or stolen in the mail. You’re not completely without options if that happens — you can call a number to report it, but there’s a $7.50 fee to have it replaced. Another disadvantage is that only one prepaid card will be issued per household. That means if you filed jointly with your spouse or have a dependent, all of your funds will be pooled into one card, and you’ll have to make several bank transfers or a cash withdrawal if you want to keep track of the money separately.

The IRS says that the card will arrive “in a plain envelope from Money Network Cardholder Services.” On the back of the card, you’ll see that it was issued by MetaBank and that it is an “Economic Impact Payment Card” — aka your stimulus payment. So if you receive a card in the mail, don’t throw it out as just another credit card offer you’re not interested in. There could be $1,200 in there. As for whether another $1,200 are coming soon to help address the financial burdens caused by the COVID-19 pandemic, though the House passed the HEROES Act, which provides for a second stimulus payment, on May 15th, it probably won’t pass the Senate.