Your Tax Refund On A Debit Card

Image via Wikipedia

The Treasury Department is launching a pilot program to deliver tax refunds directly to the taxpayers debit card. This program will cost the government $1.5 million.

An estimated nine million households do not have a bank account. Therefore they depend on receiving a paper check from the IRS. Each paper check costs the government $1 to process and mail. This new program will reduce the cost to 10 cents. But there are positive benefits to the consumers.

When a taxpayer receives a paper check he or she has to use the services of a neighborhood check cashing company. The fees are very high and it makes it difficult for the consumer to save any money. This is the underbanked and unbanked community. For various reasons these consumers do not have traditional bank accounts. They might owe money and trying to lay low for a few years. They might owe child support. They might not have the proper documentation to open a bank account.

This pilot program is targeting 600,000 low and moderate income Americans across the nation. Half of these taxpayers will be charged a fee of $4.95 per month. The other half will pay nothing. The program will be managed by Green Dot Corporation, one of the leaders in prepaid cards. The company has a customer base of approximately 3.3 million.

The Treasury program will allow users of the debit cards to use ATM machines, to pay bills, and to shop.

Related articles by House Refinance Center

Treasury Makes Short Sales Easier, Quicker
Strategic Default Will Continue To Kill Housing Recovery 
My Community Mortgage From Fannie Mae: Low Downpayment
What Is Foreclosure?
Stated Income Loans For Self Employed