THE BURNED OVER DISTRICT

The state of South Carolina will now be returning income tax refunds by prepaid debit cards. Seems like a nice idea, if you are a bank. Where a check or direct deposit would put all the money in your account, a debit card will be subject to every fee that the baksters and some merchants can get away with.

But the biggest winner could be Bank of America, which will issue the prepaid cards and stands to collect an untold amount in fees from card users and merchants who own the stores where the cards may be used. The arrangement allows the Charlotte, N.C. bank to charge some card users fees as high as $10 per transaction. And unlike ordinary debit cards linked to a bank account, there are no caps on the fees banks can charge merchants when customers use prepaid debit cards...

Prepaid cardholders can visit a bank teller anywhere a Visa logo is displayed and, during their first visit, remove their entire tax refund at no cost, according to the fees listed on the South Carolina Department of Revenue's web page. They can also use the card to make purchases in stores.

If a card user decides to gradually access their refund at a teller -- one way to avoid walking around with large amounts of cash or get around ATM limits -- they will face a $10 fee each time. At an ATM, the fee is $2.50 for bypassing one of the more than 300 Bank of America ATMs in South Carolina. That's a problem for some rural South Carolina residents and families without cars.

The average tax refund in South Carolina was $837.44 last year. Many ATMs have maximum daily withdrawal limits typically under $1,000. Plus, card users will have to figure out how to withdraw the last few dollars from their card; most ATMs only allow withdrawals in increments of $10 or $20. Card users that request cash back at a store register will likely encounter similar limits.

And at some gas stations and other stores, when a prepaid debit card is used, the store charges the card user the amount due and holds additional money as a security deposit for a few days after the purchase is made.

These aren’t simply hypothetical experiences.

It seems the state and their bankster buddies have been practicing this particular scam on the unemployed for awhile already. Good thing, too. Can't have those bums living too high off the hog.