Tax refund on prepaid debit card - another dumb idea

[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]

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]

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]

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]

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]

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]

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.