Worst Tax Product Ever: The Refund Anticipation Loan Debit Card

Refund anticipation loans are bad enough, but H&R Block and Jackson Hewitt want you to get a RAL, and then put it on a fee-riddled pre-paid debit card. What a great idea!


First of all, refund anticipation loans are bad news. Last year, despite our frequent warnings, nearly 9 million American taxpayers paid $900 million dollars in RAL expenses. The typical RAL only lasts 7-14 days according to the National Consumer Law Center, and carry APRs of up to 161%.

“For a free quick refund, file electronically and have your refund direct deposited to your own bank
account,” says Jean Ann Fox, Director of Financial Services for CFA, “You’ll generally receive an efiled,
direct deposit refund within 8 to 15 days.”

Add those costs to the fees associated with a pre-paid debit card and you’re really wasting money (our favorite is the $1.00 H&R Block charges just to check your balance. Clever!)

H&R Block suggests that you “save money” by rolling the loan over onto their “Emerald Card.” The main sales pitch for this card is that you are not required to pay H&R Block up front for the tax prep, and are instead given a magical debit card full of money! This is probably especially tempting for consumers who are otherwise “unbanked” and would have to wait longer for a paper check from the IRS. Worst tax product ever. Avoid.

Terms And Conditions (PDF) [H&R Block]
Emerald Pre-Paid Mastercard [H&R Block]
Positive improvements For Refund Anticipation Loans, But Consumers Still Warned To Avoid Them [National Consumer Law Center]