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New York City will give 500 migrant families prepaid debit cards to buy food and baby supplies as part of a pilot program.
The city has earmarked $53 million to expand the program if it’s successful.
There is a subtle, but crucial, difference between a credit card and a prepaid debit card. With credit cards, you are borrowing money — spending now and paying later. With prepaid debit cards, you spend what’s already loaded.
No spin, just facts you can trust. Here's how we do it.
Credit or debit? This familiar checkout counter question is at the heart of misinformation about a new program that aims to help migrant families in New York City.
Social media posts claim officials in the nation’s most populous city have approved a plan to give credit cards to migrants who have arrived in the city in recent months. A Feb. 2 Facebook post said, "NYC to give ILLEGALS $53 Million in Prepaid Credit Cards."
The claim has been amplified by prominent figures including Elon Musk, the CEO of X, who described the plan as "insane."
The Facebook post was flagged as part of Meta’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)
As New York buckles under the weight of a surge in migrants arriving in the city, most of whom entered the U.S. illegally and are applying for asylum, local officials are looking for ways to support them. One such plan is to give migrant families what they have termed "immediate response cards" — prepaid debit cards to be used "only for food and baby supplies," Mayor Eric Adams said.
It will begin as a pilot program with 500 families and may replace the current process of giving migrants nonperishable food boxes.
The mayor’s Chief of Staff Camille Joseph Varlack said at a city forum that the cards will be loaded with $12.52 per person per day; a city spokesperson also told The Associated Press the cards would last for 28 days, and migrants will have to attest that the card will be used in local supermarkets. If the pilot succeeds, the city plans to grow it. City records show New York has earmarked $53 million for the program and its expansion.
But social media posts claiming the cards are credit cards are wrong. They are prepaid debit cards. They may look the same, but they are not.
The federal Consumer Financial Protection Bureau describes prepaid cards and debit cards as "ways to spend money you already have." Prepaid cards are a form of debit cards, but unlike traditional debit cards, they are not connected to a bank or credit union account. Migrants without a government identity card or Social Security number have limited access to banking services.
With credit cards, "you are borrowing money, and you must repay it on the payment due date," the agency said. Credit card issuers require personal information such as a Social Security number, and people in the U.S. illegally generally cannot obtain one.
Prepaid debit cards already distribute government benefits. The federal Supplemental Nutrition Assistance Program, for example uses a form of prepaid debit known as Electronic Benefits Transfer (EBT) to help low-income families buy food.
A prepaid credit card is an oxymoron — you cannot borrow money you already have. Several news outlets including the New York Post and NewsNation that have reported on the plan incorrectly described the cards as prepaid credit cards.
"This is not an American Express card we are giving folks," Adams said. He said the program would stimulate the local economy and save the city millions from the elimination of delivery fees and food waste.
An Instagram post said "NYC to give ILLEGALS $53 Million in Prepaid Credit Cards."
New York has earmarked $53 million for food and baby supplies for migrants, most of whom entered the U.S. illegally and are applying for asylum. The city is piloting a program that gives 500 migrant families prepaid debit cards, not credit cards, to purchase these items. The program could replace the current process of giving migrants nonperishable food boxes and is not unlike the way government benefits are already distributed to help people living in poverty buy food.
We rate the claim that New York is giving people in the country illegally $53 million in prepaid credit cards Mostly False.
Facebook post (archive link), Feb. 2, 2024
The Associated Press, Migrants in New York City will receive prepaid debit cards, not credit cards, for designated goods, Feb. 6, 2024
CBS News, NYC giving pre-paid debit cards to asylum seeker families for food, baby supplies, Feb. 8, 2024
New York City government, Immediate Response Cards and Related Services, accessed Feb. 8, 2024
Consumer Financial Protection Bureau, How are prepaid cards, debit cards, and credit cards different?, Oct 19, 2023
National Council on Aging, How Does an EBT Card Work? A Guide for Older Adults, Jul. 6, 2023
NerdWallet, How Undocumented Immigrants Can Get Bank Accounts, Jan 25, 2024
Department of Agriculture, What is Electronic Benefits Transfer (EBT)?, accessed Feb. 8, 2024
X, Mayor Eric Adams, Feb. 7, 2024
New York City government, Transcript: Mayor Adams Delivers Testimony Before New York State Senate Finance And Assembly Ways And Means Committees, Feb. 6, 2024
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