Looking for a quick and easy way to receive your tax refund? This might be your lucky year. The U.S. Treasury Department is sending letters to 600,000 low-to-mid income tax filers offering them the option to receive their tax refund on a prepaid debit card. This is an effort to help people without bank accounts gain faster, more secure access to their refunds.
According to the U.S. Treasury Department, “Many of the features, including free point-of-sale transactions, free online bill pay, free ATM cash withdrawals at more than 15,000 ATM machines nationwide, and free cash back at participating retail stores, will help cardholders limit the costs of using the card. The information also explains how to sign up, and how to use the card to receive a federal tax refund and conduct everyday financial transactions” (2010).
I do have to caution though that there are some fees associated with the card. For example, if you use an out-of-network ATM you’ll have to pay a fee.
In addition to the prepaid debit card, the government is also encouraging people who use payroll cards to sign up to have their refund directly deposited on that card. They are partnering with the payroll service provider ADP to get the word out to eligible workers.
According to Audi Ritz, Business Partner Development Manager for American Financial Solutions, a non-profit credit counseling agency, “A significant amount of low-to-mid income people do not have checking or savings accounts due to insufficient funds and having their accounts closed or they owe money and are concerned about garnishments from creditors.” These options provide people a safe, convenient way to access their money and avoid overdrafts and unexpected loss of their funds.