South Carolina To Provide Tax Refunds On Bank Of America Debit Card

This tax season, South Carolina taxpayers will have three options for getting their tax refunds: direct deposit, paper check, or a prepaid debit card from Bank of America. While this last option might seem like a good idea to some, they could be paying for the convenience.

Every time you use the card at a non-Bank of America ATM, there is a $2.50 fee. There is also a $5 fee to close the account. You can go to a bank that is part of the VISA network to withdraw funds without paying a fee, but if you don’t take out all the cash the first time, there is a $10 fee for each future bank withdrawal.

Unlike some pre-paid debit cards, you can’t add money to this account. Thus, some users will choose to abandon their cards when the available funds get down to a couple bucks.

S.C. tax refunds could come with BofA card fees [Charlotte Observer]

Thanks to Sarah for the tip!

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  1. Cat says:

    So how much does South Carolina get from BofA for this?

    • Yacko says:

      Probably nothing. This is getting more and more popular for cash strapped municipal and state budgets. Governments go for this because it won’t cost them anything, not that they get something. The consumer pays the freight. And pays, and pays‚Ķ

  2. madcatcasey says:

    What a nice deal for Bank of America.

  3. bhr says:

    Stupid question, and maybe you just don’t know, but what did they do last year? This actually seems like a good thing for people who don’t have bank accounts.

    TFA actually points out that these cards are far less shifty then the super-ripoff ones you get from tax prep places.

    • Nigerian prince looking for business partner says:

      I imagine these cards are still a better deal than the typical shady check cashing places that seem to be all over the place. Even Walmart charges around $5 or $6 to cash a check.

      • Wootiejoe says:

        At the Walmarts in the DFW area that I have been to they have signs showing free tax refund check cashing.

    • Brenell says:

      Far less shitty still implies having to deal with shit. Top that pile with the fact you’ll end up supporting BofA and making them some money and you have a normal pile to deal with.

  4. Nigerian prince looking for business partner says:

    I suspect this is primarily directed at the segment of the population that doesn’t have a bank account.

    For them, direct deposit is out of the question and they would otherwise have to get a check and then pay a check cashing fee to get money from it. A pre-paid debit card is probably a better option for them in terms of fees.

    • ARP says:

      That’s my thought as well. This might be a better deal for the “bankless.” As long as they have the other options (paper check and DD), I don’t have any issues with it. Now, if they started limiting the other choices, that would be a problem.

      • Nigerian prince looking for business partner says:

        Yeah, I’d definitely be pretty pissed if it was the only option. As long as DD and checks are options, it seems like a pre-paid debit is a reasonable alternative.

    • Cor Aquilonis says:

      I worked as a volunteer tax preparer with VITA in a previous hometown. We had agreements with a couple banks that allowed the unbanked to open an account specifically to receive federal and state refunds. There were no fees at all associated with this account, and the account could be kept open or closed at the customer’s wish. They should do this instead of a scammy pre-paid card.

      • Nigerian prince looking for business partner says:

        Which banks did this and was it a state-wide thing? Were there parts of the state where people without transportation wouldn’t be within walking or public transportation distance to a qualifying bank?

        I think it’s great for banks to volunteer to help out the community but unless the service is available to everyone, I think it’s good to give people options.

  5. dulcinea47 says:

    That is just NOT RIGHT. You then have a bank account that you essentially can’t use (as the card is not reloadable) and can’t close w/o being charged for it. HOW is that okay??

    • ARP says:

      RTFA- They have paper checks and Direct Deposit for those with accounts. This is likely only for the unbanked.

      • tbax929 says:

        So, screw the unbanked? They should get screwed since they don’t have bank accounts?

        • jeb says:

          Well, they can still use the check option and cash the check. Or use this option.

          The state isn’t forcing them to use this option, just giving them another choice.

  6. az123 says:

    Toss this in with getting your “refund anticipation loan” for your federal return an you may actually pay enough in fees to make your refund go away.

    Good things here is 1) probably cheaper in fees than the anticipation loans and other things people already pay for and 2) it is not a requirement for people to do this way, so at least they are not forcing everyone to get screwed… just those who probably can least afford it

  7. Hi_Hello says:

    so if people get the debit card and withdrawal all the money the first time, it’s all good… right?
    have to be part of the visa network..that part seem complicated.

  8. cybrczch says:

    If you take a paper check to a check cashing place (like the ones offered in WalMart) you pay once to get your money, and you have it all, minus the one fee. On a debit card, they are banking on the ‘convenience’ of it to encourage people not to withdraw the whole amount at once, but to use some for groceries, some for gas, some for other things, which then increases the likelihood of incurring fees.

  9. Jawaka says:

    Gee if only there were other options other than the debit card…

    oh wait.

  10. BlueHighlighterNextToACoozie says:

    Well my card is at zero balance after just withdrawing the full balance, horray! I now need to know where to go to pay my 5.00 to BOA for closing my empty debit card. I could probably call them and get clear directions quickly right? I’m worried if I just mail 5 dollars to BOA there is a slight chance it will not reach my prepaid card account and then BOA would overdraft my prepaid card and send it to collections. Next thing I know BOA gets a judgment against me on my home and I end up in foreclosure.

    Thats nice of them to only charge 5 dollars for preventing such a potential headache!!

    • Nigerian prince looking for business partner says:

      Is your name actually on the card or is it like the prepaid cards you can buy from retailers?

  11. AllanG54 says:

    New York is doing the same thing if you request it that way. You can also have it direct deposited to your checking/savings account or take a check which the state makes no bones about saying it will take weeks to get.

  12. Evil_Otto would rather pay taxes than make someone else rich says:

    NO NO NO NO NO NO NO NO NO!

  13. gridlocked says:

    How much does Bank of America charge its own customers to use another bank’s ATM?

  14. moyawyvern says:

    I saw that as an option when I filed my taxes. Not that I was inclined to take it, since the whole prepaid debit card/paycheck card concept makes no sense to me. Direct deposit is way faster, anyway. Got it in like a week.

  15. Difdi says:

    So, I find myself wondering…if you empty the account, and don’t pay the $5 fee to close it, does BofA charge a “maintenance fee” on the empty account? If they do charge it, does that fee get deducted from your tax refund next year?

  16. jojobreckinridge says:

    Not being a smartass, but what are the primary reasons a person wouldn’t just get a damn bank account? I’ve had one since I was 12, so my brain just doesn’t process the concept of not having one.

    When my husband owned a restaurant, several of his employees didn’t have bank accounts and it was always a pain in the ass for them to cash their checks b/c our business account was with BoA (big mistake, thus the first and last account with them).

    • Lucky225 says:

      Some people don’t feel like giving their SSN, Driver License, home address, date of birth, etc. to every person who asks for it just for the convenience of holding their own money.

  17. Lucky225 says:

    http://usconstitution.net/const.html#A1Sec10

    “[No State shall] make any Thing but gold and silver Coin a Tender in Payment of Debts;“

    I don’t think a fee based card issued by an arbitrary financial institution falls under gold and silver coin a tender in the payment of a debt(which they owe to the taxpayer).

  18. mcgyver210 says:

    I will never do any business with BofA they are not a trust-able organization IMO.

  19. NewsMuncher says:

    NO

  20. Timyle says:

    What’s so bad is even tho I checked the box for paper check on the SC tax return. The state sent my Info to BOA anyway. This is wrong and a misuse of private information. I’m not the only one this has happened to and things appear to be heating up. I see a class action law suit coming to SC real soon!