IRS prepaid debit cards
All right, folks — you have less than a month to get those taxes filed! Each year, we all pray for refunds. Some of us choose to have our refund deposited directly into our bank accounts, while others select to have it sent to us by check. This year, 600,000 Americans will have the option to receive their refunds via prepaid MyAccountCard Visa debit cards from Green Dot, a leading issuer of prepaid cards.
This is currently just a pilot program for moderate to low income earners, and you have to be invited to participate. These new cards are issued by Bonneville Bank, which the U.S. Treasury selected as its financial agent. Bonneville in turn partnered with Green Dot to manage the program. The government is trying to figure out whether American consumers will embrace this type of payment, and is also testing to see how much, if anything, people will pay for this option. Whether it is free depends on which pilot test group you are in.
According to premier tax blogger Kay Bell over at Don’t Mess With Taxes, these are the four prepaid card options being tested:
1. No monthly fee and no linked savings account.
2. No monthly fee and a linked savings account.
3. A $4.95 monthly fee and no linked savings account.
4. A $4.95 monthly fee and a linked savings account.
The goal of Green Dot is to save the government money as the cards will replace issuing millions of checks. It has benefits for consumers, too, especially those without bank accounts, as having a prepaid card precludes them from having to use expensive check-cashing services to cash their refund checks. Cardholders can use these cards at no charge for transactions, online bill pay and ATM withdrawals. It’s not ideal for those who prefer to dump their refunds into savings or use it to pay off credit card debt. Congress is currently investigating it to see if it is effective and consumer friendly. I’m interested to see what the results are!