Tax refund on prepaid debit card - another dumb idea

[Slug]

Originally Posted by project15

Also, the commercials that brag about getting money straight from the agent the day you file rather than waiting for a check from the IRS bother me. I'm sure the agent is taking a hefty percentage of that refund check.

Definitely, I mean look at the service they're providing to the overall US economy by getting $ back in the hands of the common man...

/sarcasm

[jodi]

Just found out today that my coworkers girlfriend paid $200 to get her card immediately with a $9000 rebate on it. Oy. His exact words were "What's $200 when you're getting back nine grand?", to which I replied, "It's $200!".

I do my own taxes with Turbo Tax, skip the e-filing (about $20, I believe) and mail in my paper forms. I still always have my rebate direct deposited within two weeks. It's not like you're going to have to wait months here!

[disneysteve]

Originally Posted by jodi

Just found out today that my coworkers girlfriend paid $200 to get her card immediately with a $9000 rebate on it.

I don't know what is worse - the fact that she paid $200 (plus interest, mind you) for a $9,000 refund anticipation loan or just the fact that she got a $9,000 refund. That's insane. She could have gotten an extra $346 in every bi-weekly paycheck all year long instead of that $9,000 refund.

[jodi]

Actually, I'm pretty sure a huge chunk of that was the EIC (single mom, two kids, mediocre job), so wouldn't have had as huge an increase in her paychecks. But you know the story, it would have been spent if it had been in the weekly paycheck. At least I'm trying to convert my co-worker, who wants to buy a house with this girlfriend in the next year. He's trying to get her back on track regarding saving, not using the credit cards, etc.

[alicia_schutte]

Last night my co worker was telling me she lost her refund debit card from H&R Block TWICE is 2 days!!! Plus she has chosen to spend it quickly dispite the car problems and other money issues she is having.

I know where my refund is going... CREDIT CARD DEBT! I will dig myself out of this hole!

[HelpMeFriend]

I got my money direct deposited, so that I only had to write a check to a CD at my local bank branch. I feel stupid now. I had plans for my money. Things that my family had been living without, we must live without for another 6 months.
But, with the extra 32 dollars that I will earn in intrest, I may find something that I could not afford before.
I have put $450 on a credit card, and the rest in savings.
At least I still have some of my refund, since I got it yesterday.

[rapidtax.org]

As a provider of Refund Anticipation loans, I can tell you that most of the people who request one are not the people who have bank accounts. They generally are in debt up to their a$$, about to be kicked out of their house, will have no heat or electricity, and do not have the financial intelligence to understand why they are in this predicament. So is this a good thing or bad? If I keep them from getting kicked out of their house, loosing their car, loosing their job, etc ... am I a bad person?

Everybody needs to look at this from the perspective of the people who ask for one. Don't do the roe vs wade thing.. what do they really need? And I mean NEED!!!

If you really want to help, donate your retirement fund to the underprivileged. Do you think they will do the right thing with it?

[rapidtax.org]

Originally Posted by disneysteve

I don't know what is worse - the fact that she paid $200 (plus interest, mind you) for a $9,000 refund anticipation loan or just the fact that she got a $9,000 refund. That's insane. She could have gotten an extra $346 in every bi-weekly paycheck all year long instead of that $9,000 refund.

What if she lost the abilty to get that $9k refund and had to pay it back. It happens. You need to understand the whole refund process before posting a comment like that. If the child she is claiming is no longer avaliable for EIC, then she is screwed.. huh?

Before you post a comment, be sure you know what you are talking about..

[disneysteve]

Originally Posted by rapidtax.org

As a provider of Refund Anticipation loans, I can tell you that most of the people who request one are not the people who have bank accounts. They generally are in debt up to their a$$, about to be kicked out of their house, will have no heat or electricity, and do not have the financial intelligence to understand why they are in this predicament. So is this a good thing or bad? If I keep them from getting kicked out of their house, loosing their car, loosing their job, etc ... am I a bad person?

So we're to think that you (collective you, not you personally) are doing some great public service by giving these people, who according to you are struggling to get by, a loan and charging triple-digit interest rates? What a saint. If this were truly a public service and not a huge money-making endeavor, the interest rate would be comparable to other personal loans. Even charging the average credit card rate of about 18% would be a phenomenal improvement from the 150% or higher rates generally charged.

[tripods68]

This is all finance "gimmicky" type program that take advantage of people who are less educated, less fortunate lower socio-economic class. H&R sees these are their high profit margins especially if loans goes unpaid. That is why them or Pay Day Loans alike are sued constantly by state regulators whom carefully target their products. I guess, considering the options that these people have; either borrow from the MOB, Drug dealers, H&R Block or Pay Day Loans. It's no brainer.

[jIM_Ohio]

As an FYI HR block sells various financial services as part of preparing tax return.

In addition a significant amount of their clients do not have bank accounts, so the debit card is a way for them to "cash" their refund check without needing a bank.

[JinCO]

Originally Posted by jIM_Ohio

As an FYI HR block sells various financial services as part of preparing tax return.

In addition a significant amount of their clients do not have bank accounts, so the debit card is a way for them to "cash" their refund check without needing a bank.

I don't understand why there are so many people out there without a checking account. What causes all of these people to not be able to open a checking account? Bad credit? Not US citizens?

[jIM_Ohio]

Originally Posted by JinCO

I don't understand why there are so many people out there without a checking account. What causes all of these people to not be able to open a checking account? Bad credit? Not US citizens?

If they bounce enough checks, the banks will close their accounts for them. That is one example. Those people still need a way to file a tax return and get a refund check cashed.

[GREENBACK]

I'm sure most here have met and probably still know many folks that see that tax refund as a bonus. The sooner they can lay their hands on the "jack" the better. H&R and and all the other tax services are fully aware of these people. They charge to do your taxes and then, for the cherry on their cake, they basically give you a short term jacked up loan. They are just being a little more creative now with debit cards and similar programs. Does this remind any of you of what a payday lender does?

[zetta]

I don't understand why there are so many people out there without a checking account. What causes all of these people to not be able to open a checking account? Bad credit? Not US citizens?
If they bounce enough checks, the banks will close their accounts for them. That is one example. Those people still need a way to file a tax return and get a refund check cashed.

Some low-income people who are paid in cash don't have access to direct deposit, and so would have to maintain minimum balances in checking to avoid fees. My guess is that many who live literally payday to payday find that banking just adds hassle, since they would be withdrawing it all anyway.

Unless there are ridiculous fees, getting the refund on a debit card is not necessarily a bad idea -- it's all in how the person uses the money on the card.

[disneysteve]

Originally Posted by JinCO

I don't understand why there are so many people out there without a checking account. What causes all of these people to not be able to open a checking account? Bad credit? Not US citizens?

A number of reasons.

1. Not US citizens
2. Bad credit
3. Live paycheck to paycheck and simply have no use for an account since they don't have any money to keep in it.
4. Work "under the table" and get paid in cash which they want to keep off the books.
5. Receive public assistance and want to hide any assets so they continue to qualify. If they had any substantial amount in a bank account, that would count against them when applying for aid.
6. Don't want to/can't afford to pay any fees to maintain an account.

[tripods68]

Originally Posted by zetta

Some low-income people who are paid in cash don't have access to direct deposit, and so would have to maintain minimum balances in checking to avoid fees. My guess is that many who live literally payday to payday find that banking just adds hassle, since they would be withdrawing it all anyway.

Unless there are ridiculous fees, getting the refund on a debit card is not necessarily a bad idea -- it's all in how the person uses the money on the card.

When I worked for Wells Fargo, many people that came with low income earners have negative credit with check-system; therefore, we couldn't open any account for them. Many wrote bad checks that were written off by banks previously. It takes 3-5 years with good credit standing history to reinstate your account back to normal status once that moment you are reported.

Illegals now can open checking/saving accounts once they show some sort of documents like Consular ID even without valid SSN. A TAX ID issued by the IRS is sufficient and accepted now when you go to BOFA or Wells Fargo.

[Joan.of.the.Arch]

You do not need a Social Security number to open a bank account. I have a couple of friends who come here on visitor visa and have bank accounts here to make things easier. I've been with them opening the accounts, making deposits & withdrawals.

Another thing that people without bank accounts do is sign the check over to a friend who does have an account and get it cashed through them. If they do that, they don't lose the money a check cashing place or H&R Block takes. Don't ask me how many times I have done this for people...Many times for the same two people.

[tripods68]

Originally Posted by Joan.of.the.Arch

Another thing that people without bank accounts do is sign the check over to a friend who does have an account and get it cashed through them.

Many banks have curtailed this practices now where most of the SCAM happens--cashing third party checks using someone else's account with good history. Later to find out, the check that were cash are no good. Its also known as Nigerian Scam. I'm sure you heard of it.

[jIM_Ohio]

Originally Posted by Joan.of.the.Arch

You do not need a Social Security number to open a bank account.

Have you tried doing this since the Patriot act? I have done so on two occasions for a soccer team, both times I left my SS off the application and both times the account was frozen within 30 days.