Fewer than one-third use debit cards in Iowa

About 75 percent of Iowa's unemployment insurance benefits go directly to recipients' bank accounts.

In June 2012, $6.86 million in unemployment was deposited directly, compared to $2.13 million put on debit cards.A small share of payments, $126,000 in June, still came on paper checks, according to Iowa Workforce Development.

The state used to make all payments via checks sent through the mail, but the federal government stopped paying for postage.

Iowa contracted with Xerox subsidiary ACS in 2008 to administer the unemployment debit cards. The state pays nothing for the service, shifting the cost of the program to ACS, which in turn makes money from fees charged to users.

Exactly how much ACS and its subcontractors make in fees from unemployed Iowans is confidential, the company said.

In Iowa, unemployment recipients who use debit cards get one free ATM withdrawal per week, as long as they use an ATM operated by Wells Fargo, Alliance One or MoneyPass. Additional ATM transactions and non-network withdrawals cost $1.35.

Other fees include 50 cents for an ATM balance inquiry or ATM denial. There is a $3 fee for international ATM withdrawals, plus 3 percent of the transaction amount.

Card holders get six free customer-service phone calls per month, which cost 40 cents per call.