The Trouble with Plastic

A recent Letter to the Editor in the Hartford Courant expressed one couple's frustrations with the state's new method of returning tax refunds via debit card, rather than the familiar paper checks to which many had become accustomed.  As coordinator of CAHS's Volunteer Income Tax Assistance (VITA) program, which provides free tax preparation to households earning less than $50,000 a year, I saw in this letter echoes of similar frustrations passed along to me from some of the volunteer tax centers we partner with around the state. 

Most of the confusion seems to center around how to get the money off of the debit card and either into one's pocket or into one's bank account, and many have wondered why taxpayers weren't at least offered a choice of paper vs. plastic.  Others are concerned with the implications of the state partnering with Chase Bank to offer the card, questions about the kinds of fees that may be associated with using the card, and concerns about why a private bank should have the opportunity to profit off of government tax refunds.

Here are a few ways to keep the confusion to a minimum:

1. If you have a bank account, have your tax refund direct deposited into it.  You will receive your refund much more quickly, the process is safe and secure, and the money will be immediately accessible from your account.  No plastic necessary. 

2. If you do NOT have a bank account, you will have to take the refund on the state debit card.  But by taking a few minutes to understand how the new card works, you should be able to access your money without sending an extra dime to Chase Bank.  The Courant published an extremely helpful article Monday that briefly covers all of the ins and outs, and the CT Dept. of Revenue Services' website also has a very clear and informative FAQ section on the cards. 

Some of the highlights: the card must be activated before you use it, by calling Chase Customer Service at 1-866-586-1705.   The Courant article provides a great summary of how to activate, and instructions will also come with the card.

Also, two of the quickest ways to get the money off the card are either by (1) visiting a Chase or People's Bank ATM and withdrawing the funds for free (Chase doesn't charge a fee for your first 3 visits to other banks' ATMs, either, but those banks may charge you); or (2) make a small purchase at any retailer that accepts debit cards with your Chase card, then request cash back (this is also free, not counting the purchase). 

If you do have a bank account (again - we recommend avoiding this altogether next year by using direct deposit!), you can go to your bank and request a cash advance from the teller, which is another free option.  You'll just need to know the available balance on the card (you will hear this amount when you call to activate).    You can then deposit the cash into your own bank account.  Again, both the Courant article and the DRS website provide step-by-step instructions for all of these options.

Although it's understandable to be concerned about the state's partnership with Chase,  the state has stated several times that the old method of cutting paper checks - also through a bank, similar to how most of our paychecks are processed - actually cost Connecticut and its taxpayers more money than the plastic option ($300,000 more per year, to be exact, according to DRS).  The debit cards are also more secure than a paper check, and if you follow the advice posted above, you can access your funds without paying any fees, unlike having to pay a check casher (for those without bank accounts).

It's never easy adjusting to changes - especially when they have to do with your hard-earned money.  But by spending a little time to become informed this year, hopefully next year we can prevent some of this trouble with plastic.

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