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A new pilot program for low-income Americans could allow individuals to get their tax refunds on prepaid debit cards. The government said it will offer 600,000 low- and medium-income taxpayers the chance to put their tax refunds on prepaid debit cards. Half the 600,000 offers from Treasury will carry a $4.95 monthly fee, while the rest will be free. Consumer advocates say the goal is to get more people who lack bank accounts to receive their money in direct-deposit-like style, which costs the IRS less. It is also an attempt to discourage people from seeking costly refund anticipation loans, also known as RALs.


1. Do you think that cardholders should foot these card fees or should the IRS?

2. Research RALs.  What is the average interest rate on these loans?

3. What is the difference between a RAL and a RAC?

Source: CNN Video. (2011). Tax Refunds on Debit Cards, January 14. (Retrievable online at

Hunsberger, B. (2011). Tax refunds via debit cards….with fees. The Oregonian, January 17 (Retrievable online at