I saw a big billboard for Jackson Hewitt showing a broadly smiling woman of indeterminate ethnicity holding a fistful of money that she just got by getting a refund anticipation loan, and it reminded me of how we need to do our annual telling of people to once again stay away from said refund anticipation loans.

The way they work is that the lender, often in the form of a tax preparer, fronts you the refund you’re expected to get. In exchange for getting your refund a few weeks in advance, you pay them interest on the loan that can vary from 40-700%. Not a good bargain, just a tax on the impatient and those bad at math. In fact, H&R Block was once sued for systematically overcharging customers on refund anticipation loans. If you need your refund as speedily as possible, just e-file and get it direct deposited into your bank.

(Photo: Noah Berger)

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