Thursday, January 27, 2011

A Case Against Rapid Refunds

RALs, are often referred to as “rapid refunds,” and are short-term loans backed by an expected federal income tax refund. These RALs are essentially fast cash personal loans with extremely high interest rates. Instead of waiting a few weeks for one’s tax return to be processed, many use these loans and are charged interest rates that can range from 50 to 500 percent. In the majority of cases, one would be better to wait a few weeks to get their tax return.

According to Francine L. Huff of, “Many tax filers should instead consider using free tax preparation services in their local community. Most free services will electronically file tax returns, resulting in taxpayers receiving their refunds faster than if they mailed their returns. The refund can be direct deposited in a bank account in eight to 10 days, whereas receiving a check may add another week. Filing electronically can also increase the accuracy of a return”.

It should also be noted that using rapid refund tax filing services can also open taxpayers up to scams. For example, New York’s Department of Consumer Affairs investigated hundreds of tax preparation services and issued over 1,200 violations at the beginning of the 2009 tax-filing season. Many of the violations were for deceptive advertising for rapid refund services.

While I do not recommend Rapid Refunds, there are circumstances where you need cash and you need it fast. If you are at risk of not feeding your kids then obviously you need that money now, regardless of the expense. It should be noted however, that just because you are in that circumstance once does not mean you must stay there. You should examine what got you into that bad of a situation to begin with so you can plan better going forward and not get into the same situation again. Typically, it is a lack of tax planning, budgeting, financial management, emergency reserves, or a combination of these.

For more on rapid refunds see this Forbes article.

For more financial advice and budgeting tools visit

What about you? What are your experiences with these types of services? I'd love some feedback on the subject.

Wednesday, January 19, 2011

$20 Amazon Gift card for $10 on Living Social

Click here for the deal

LivingSocial- similar to groupon - has a deal on a $20 Amazon gift card for only $10.

Here's how to get this deal:

1. Click here for the deal

2. Enter your email address and click "Send me Free Daily Deals"

3. Click "Sign Up" in upper right corner of page and create an account

4. Now click on “More Deals” on the left hand side and find any city (as this is a nationwide deal)

5. Click on “Buy Now” on the Amazon gift card deal and complete your order

Fine print: Limit 1 per person, no gifting allowed • Gift Card does not expire • Voucher purchase is valid for US-based customers only • LivingSocial Terms and Conditions apply •

Thanks to Gimmie Freebies for the heads up!

Tuesday, January 11, 2011

Five Things to Never Pay For

These five tips from the yahoo finance team can help you meet your financial goals this year and on.