Should You Load Your Tax Refund to a Prepaid Card?

Consider these pros and cons

A smiling couple debates whether to get their tax refund on a prepaid card as they sit in their bright living room.

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A tax refund can provide a much-needed windfall when you need extra cash. There's more than one way to receive a refund, though. You can get your refund via direct deposit, a paper check, or with some tax preparers, a gift card or prepaid debit card.

As you gear up to file your taxes, here's what you need to know about tax refund gift cards and prepaid debit cards.

How Does Loading a Tax Refund to a Prepaid Card Work?

Tax refund gift cards and prepaid debit cards aren't exactly the same, and it's important to know what you're getting if you choose this option.

If a tax preparer offers a refund gift card, it may come with limits on where or how you can use it. For example, H&R Block allows you to load your tax refund to an Amazon gift card, and will even add an extra 3.5% of the amount you load as a bonus. That's great if you plan to buy something on Amazon, but limiting if you'd rather use your refund elsewhere.

The tax preparer may also limit how much of your refund can be loaded onto the gift card. For example, H&R Block lets you put a maximum of $5,000 of your refund on an Amazon gift card.

Prepaid debit cards offer more flexibility. For instance, if your tax refund debit card has the Visa logo, you can use it to make purchases anywhere Visa is accepted. If your prepaid debit card bears the Mastercard logo, you'll be able to use it anywhere Mastercard is accepted.

Here’s a closer look at some of the most common tax refund prepaid debit cards.

H&R Block Emerald Prepaid Mastercard

If you plan to file your taxes through H&R Block, you could choose to receive your tax refund on the Emerald Card. It’s reloadable, so you can add more funds to it after you’ve spent your refund, although you’ll pay a $4.95 fee to do so.

Here are the main fees to know with this card:

  • Monthly activity fee: $0
  • ATM withdrawal fee: $3 (plus any ATM operator fees)
  • Cash reload fee: $4.95
  • Inactivity fee: $4.95 a month (after 60 days with no transactions)

You can use this card to make purchases anywhere Mastercard is accepted, or withdraw cash from any ATM in the U.S. You can also make over-the-counter cash withdrawals at any bank, but H&R Block charges $35 per transaction for that convenience.

TurboTax Turbo Card

The TurboTax Turbo Card is a Visa prepaid debit card that can be loaded with government payments, including tax refunds. You can also opt to have paychecks and other government benefits loaded to this card via direct deposit, in which case, they could be available between two and four days before payday.

Here are the main fees to consider with this card:

  • Monthly fee: $4.95, unless you loaded at least $1,000 in the previous month
  • ATM withdrawal fee: $2.50 out of network, $0 in network (plus ATM operator fees)
  • Cash reload fee: $5.95
  • Inactivity fee: none

Netspend Visa Prepaid Card

The Netspend Visa Prepaid Card allows you to receive government benefits, including tax refunds, and paychecks up to two days early via direct deposit. This card also offers the chance to earn 5% APY on up to $1,000 in a Netspend savings account, as well as the potential to earn cash-back rewards on select purchases. However, it appears that you need to sign up before accessing more details about the rewards.

Here are the most important fees charged for this card:

  • Monthly fee: $0 to $9.95, depending on your plan
  • Purchase fee: $0 to $1.50 per transaction, depending on your plan
  • ATM withdrawal fee: $2.95 (plus ATM operator fees)
  • Cash reload fee: up to $3.95
  • Inactivity fee: $5.95 (after 90 days with no activity)

There's also a $9.95 purchase fee if you buy your card at a retail location before loading it with your tax refund.

American Express Serve 

The American Express Serve prepaid debit card is one more option for your tax refund. AmEx claims loading your refund to this card gives you access to the funds up to two days earlier than if you had them deposited to your bank account. You can use your card to shop anywhere American Express is accepted or withdraw money at more than 30,000 MoneyPass ATMs.

Here are the most important fees to know with this card:

  • Monthly fee: $6.95; $0 when you direct deposit $500 per month or if you live in New York, Texas, or Vermont
  • ATM withdrawal fee: $0 at MoneyPass ATMs; $2.50 at other ATMs (plus ATM operator fees)
  • Cash reload fee: up to $3.95

You can have your refund deposited to your Serve card whether you file directly with the IRS or use a tax professional. If you plan to use the card in the long term, you can upgrade to the American Express Serve Cash Back card to get 1% cash back on purchases, but you’ll pay $7.95 per month.

Pros and Cons of Tax Refund Gift Cards

  • Convenient

  • Easy to use anywhere

  • Often reloadable

  • May come with fees

  • Replacing a lost or stolen tax refund debit card could be a hassle

  • Refund can only be used for spending

Pros Explained

  • Convenient: Prepaid debit cards can make getting your tax refund easier if you don't have a bank account or you don't want to wait for a paper check, which can take six to eight weeks to arrive. Some prepaid cards even claim you’ll get your refund up to two days earlier than it would have arrived in your bank account.
  • Easy to use anywhere: If your card has the Visa or Mastercard logo, you can use it to make purchases anywhere Visa or Mastercard are accepted. Depending on the card, you may also be able to withdraw cash from an ATM. This flexibility makes prepaid debit cards a better choice than gift cards to a specific retailer.
  • Often reloadable: Once your refund runs out, you may be able to reload your card for continued use. But before you do, check whether you’ll pay any extra fees to do this.

Cons Explained

  • May come with fees: You may have to pay fees to load your tax refund onto a prepaid debit card, to maintain the card monthly, or to make purchases or ATM withdrawals. Even small fees can nibble away at your refund.
  • Replacing a lost or stolen tax refund debit card could be a hassle: If someone steals your card out of your mailbox, for instance, you'd have to reach out to the issuer to see how to get it replaced—and there might be a fee. That process can be time-consuming and worrisome, especially if you were counting on your refund money to pay bills or cover an unexpected expense.
  • Refund can only be used for spending: A prepaid debit card is more flexible than a gift card, since you can pay bills or withdraw cash with it. But getting your tax refund this way still sets you up to spend that money, as opposed to putting it in your savings account or emergency fund.

Alternatives to Tax Refund Cards

A prepaid debit card or gift card can make it easy to get your tax refund. But if you have a bank account, the IRS recommends direct deposit as the best option. It's possible to get your refund in as little as three weeks. And you can split your refund between up to three bank accounts to designate specific amounts toward specific goals.

Having your refund deposited into a bank account helps you avoid prepaid debit card activation, maintenance, or withdrawal fees. It’s also more secure than a prepaid debit card.

If you don't have a bank account but you do use mobile payment apps like Venmo, you have another option. Venmo accepts direct deposits from government entities, including the IRS. If you already had your economic impact payment or stimulus check sent to your Venmo account, receiving your tax refund there could be a good option.

Finally, you can always opt for a paper check if you don't want to deal with a prepaid debit card, don't have a bank account, or don't use mobile payment apps. Just keep in mind that you could wait significantly longer for your refund to arrive if you choose this option.