View Full Version : 401k debit cards

March 3rd, 2008, 11:32pm
Wow, I wouldn't think this would be a good idea.

March 4th, 2008, 7:41pm
Me, either. Apparently it's a loan from your 401K account, just a lot easier than filling out paperwork. I agree you and with the person in the article that said it was a bad idea. I liked that she showed how much it can hurt your retirement balance.

I bet there are people that will use it, though, without thinking it through.

March 4th, 2008, 8:03pm
Wow....at least a 401k loan is a bit of a process that you need to think about and those disclosures about interest and penalties are made every time the money comes out ...cards are a bad idea...very very bad.

March 5th, 2008, 12:47am
I really do not see how this would be any different than the way it is set up now (getting a paper check).

All this is doing is putting your "loan" on a debit card. The paperwork for the loan is still the same and will remain the same. A loan on a 401k is a "loan"...no matter how you choose to take the delivery of the loan.Yes, a debit card would be a lot easier to use probably; however, the loan is already taken out...so what difference does it make after the fact?
From the article posted above:
"The card is essentially a debit card that allows you access to money from an approved 401(k) loan. Like with any 401(k) loan, an employee applies for the loan with his employer.

If the loan is approved, rather than having the loan amount deposited into your checking account, it is deposited into an account and can be accessed through a debit card."