Payroll cards for employees act like prepaid cards that employers can use to pay employees their wages. Each payday, the employer loads the card with the employee's earnings for the pay period. A pay card is also known as a payroll debit card or payroll card. Pay cards are like reloadable debit cards.

Employees can use paycards similarly to bank-issued debit cards when making purchases, paying bills and even withdrawing cash at ATMs. But paycards can come with employee-paid fees and are regulated in some states.

For employees, advantages to payroll cards include the ability to pay bills online, shop online, make automatic bill payments, and get cash at an ATM. Disadvantages include the possibility of monthly maintenance fees, out-of-network ATM fees, and balance inquiry fees.

If you accept, you'll receive your paycheck as a direct deposit onto the card instead of getting a physical check or a direct deposit into your bank account at the end of each pay period. You can then use the card for purchases or to withdraw cash from an ATM, similar to a debit card.

There are various reasons an employee or employer might favor one method over the other. Direct deposit requires the employee to have a savings or checking account to deposit funds, while a paycard is simply a prepaid, reloadable card that requires no bank account.

A paycard is a convenient way for employees to be paid. Instead of a traditional bank account, pay is loaded into the paycard account. Employees can then save or spend their money using their paycard. Paycard accounts have many of the features of a traditional bank account but also may have fewer fees10.

If your employer offers to give you your wages on a card, it's likely offering you a pay card, or a payroll card. If you accept, you'll receive your paycheck as a direct deposit onto the card instead of getting a physical check or a direct deposit into your bank account at the end of each pay period.

Bank accounts provide interest, whereas payroll cards do not. Direct deposits cannot be lost or stolen like a payroll card can. Additional fees apply – such as when an employee views their balance.

There are situations where direct deposit might not be the best form of receiving payment. Payroll cards make it possible for those who do not have a bank account or local banks near them to receive a paycheck. Printing out checks can be expensive, and some banks even charge extra for direct deposits.