People using state-issued debit cards for unemployment benefits will no longer have to pay many of the fees associated with using the cards.

The Department of Labor and Employment renegotiated the contract with J.P. Morgan Chase to eliminate the fees, which will save card users a total of $500,000 a year.

The agreement eliminates point of sale fees for each transaction, saving $60,000 a month. Cardholders can also withdraw up to $809 within a 24-hour period with no charge.

Before the agreement was signed, cardholders were charged 75 cents if a debit card was denied. Those fees were costing cardholders $14,000 a month. The change provides one free denied transaction for each deposit the Unemployment Insurance Program makes on the account.

The cards were initially introduced as a way to expedite payment of benefits, and eliminate the costs of warehousing check stock, printing and mailing checks, said DOl executive director Ellen Golmbek.

“However, since the debit card was introduced, we have worked to find ways to address concerns about bank fees. In Feb. 2009, claimants could have unemployment benefits deposited into their bank or credit union, and we renegotiated one free teller withdrawals to two free teller withdrawals per month.”

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Tips for avoiding debit card fees can be found at