Five Reasons to Avoid Instant Tax Refunds

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In this age of instant satisfaction, Tax Refund Anticipation Loans (RALs) are truly not the best option for hard-working taxpayers. Here are five simple reasons why consumers should avoid these not-so-satisfying loans this tax season:

1. Triple-Digit Interest Rates
The annual interest rate for the typical "instant refund" can range from 50% to 500% (depending on how long it takes the IRS to process the paperwork and issue the refund).

2. Not-So-Fast Service
In most cases, a tax refund loan only speeds up the process for a few weeks or less and with recent technological improvements in the IRS, the benefit may even be reduced to just a few days if a taxpayer files electronically.

3. Pickpocketing Fees
Even if you manage to avoid the posted triple-digit interest rates, many refund anticipation loans carry additional "administrative" fees designed to steal away more of your own hard-earned money.

4. Unexpected Refund Changes
If for any reason the amount of the anticipated refund changes or is denied by the IRS, the Quick Cash Refund quickly turns into Long-Term Debt as the taxpayer must unexpectedly paid the difference or fear a debt collector.

5. It's Your Money, Keep It!
In this economy, every little penny counts. American taxpayers work too hard throughout the year to give up such a huge chunk of their refund. Instead of using a Refund Anticipation Loan, open a checking account; file your taxes electronically; wait for the direct deposit; and keep more of your money!