Prepaid Cards at Tax Time Could Help Those without Bank Accounts

Brief

Prepaid Cards at Tax Time Could Help Those without Bank Accounts

Abstract

Offering prepaid cards as an option on federal tax forms could help connect unbanked adults to the financial mainstream. The Treasury Department tested card features through a pilot that offered low-income adults prepaid cards for electronic delivery of tax refunds and everyday financial transactions. Key findings through the second year of the evaluation include: unbanked adults were 2.5 times more likely to directly deposit a tax refund into the card; repeat use of the card for tax refund deposits was substantiala quarter of people who directly deposited a tax refund in 2011 did so again in 2012; and card cost matters for card take-up and use.

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