Friday, 14 January 2011

United States Government to offer prepaid debit cards for tax refund

The Treasury Department of United States wishes to pay tax refund through prepaid debit cards. This will be helpful for lower income tax payers those who do not have bank accounts and also can reduce the paper work and related expenses. They will be invited to activate debit card for getting direct deposit.

With the help of this debit card the card holders can withdraw their income tax refunds through cash counters or ATMs

The refund through paper checks cost more than that of direct deposit and around 600000 claims are there every year. Normally it costs around $ 600000 and if they made direct deposit it will cost around $60000 only.

There are around 600000 tax payers does not have bank accounts and the direct deposit to bank account is not possible for them. The importance or direct deposit debit card is here. According to the recent survey held by Federal Deposit Insurance Corporation, there are about nine million households do not have a bank account.  Some of them already closed their bank accounts due to the unbearable charges of fees and overdraft charges.

This new program will allow consumers to do a lot of useful transactions such as free bill payment, free ATM withdrawals and even allow making shopping with debit cards without any additional fees. This service may be with a lower rate of fees for somebody else and free for others according to some criteria.

As per the Treasury Department, it was also starting a pilot program to encourage some workers who receive wages through payroll cards—roughly 1.7 million people—to receive their 2010 tax refunds on those cards.

No doubt this is a useful program and the taxpayers should not wait more for the refund and also can reduce their cost of getting the refund and other daily expenses.

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