"Free checking is disappearing," Ridout says. "But it is available if you look beyond megabanks."
Consumers reluctant or unable to open bank accounts would be better off receiving their income tax refund by paper check rather than on a prepaid card, Ulzheimer advises.
"At least with check cashing, you know how much you're going to pay," Ulzheimer says. "There are no hidden fees."
For example, if you receive a $500 tax refund from the IRS, it will cost up to $3 to cash that check at a Walmart store, according to the retailer's website. Walmart charges $3 up to $1,000 and $6 for any checks worth more than $1,000. It also limits check-cashing to $5,000.
Put that same $500 tax refund on a TaxAct Endeavor Card, and you're out $16.95 for the enrollment fee (see chart). If you take out money at an ATM twice on the prepaid card, you can subtract another $3.90 from your tax refund. And that doesn't count any surcharges the owner of the ATM may charge.
Some prepaid cards are costlier than others. The fees run the gamut. Because fees on prepaid cards vary so widely, it's important to study the terms and conditions carefully before putting your tax refund on a prepaid card.
"They really need to read the fee structures and understand what they're buying," Jackson says. "There's a big difference in the cards and the fees."
Bankrate.com breaks down some of the fees on four prepaid cards offered by popular tax preparer companies. The table doesn't include all fees on the cards.
Popular tax preparer card fees
| ||Enrollment fee||Monthly fee||ATM fee||ATM Balance fee||Other notable fees|
|TaxAct Endeavor Card||$16.95||None||$1.95||95 cents||$3.25 per customer service call|
|TurboTax Refund Card||None||First month free; $5.95 unless you have at least $50 balance||$2.50 at non-Allpoint ATMs; first withdrawal free||50 cents||$4.95 to replace card|
|H&R Block Emerald Card||None||None||$2.50||$1||$2.50 monthly inactivity fee after three months of no activity|
|Jackson Hewitt smartcard||None||$5.95||$2.50||None||$55 express shipping of replacement card|