How to Get That Tax Refund Fast and Accurate
SAVIDGE: It is almost the time of year -- that time of year -- a lot of people are looking forward to their tax return refunds. But what if you don't want to wait weeks or maybe months to get your money? Well, financial and business consultant Eric Amado joins us live from Dallas. Good morning to you, sir. Eric, you know, I have seen these ads for refund anticipation loans. Can you tell us just what are they?</s>ERIC AMADO, TAX EXPERT: Absolutely. These types of loans are short term cash advances based on anticipated tax refund from the IRS. These loans are predominantly sought in low income and minority neighborhoods and have very, very high interest rates.</s>SAVIDGE: So, when I hear that, almost sounds predatory. So, what are the advantages and what are the disadvantages of these sorts of loans?</s>AMADO: Absolutely. Well, the advantage is that, if you need fast cash, a lot of people will go this route. With these types of loans, you can get your money within one to three days. If you are having problems paying your bills, some people will try these loans. Now, the disadvantage is, like you said, it's predatory. The fees can be very, very high -- a lot of big fees inside. And what makes this very controversial is that a lot of people don't know exactly what they're paying for.</s>SAVIDGE: And, you know, I can see where the anticipation builds into this. You want your money. Of course, you want it right away. You believe you're entitled to it. So, why should you have to wait?</s>AMADO: Absolutely.</s>SAVIDGE: But why should you really avoid these refund anticipation loans. I presumed, because just as you described, you're going to pay for it.</s>AMADO: Absolutely. It's a very, very bad thing, I think. Let's talk about example I have for the viewers so we can explain what's happening here.</s>SAVIDGE: Sure.</s>AMADO: So, basically, let's say, for example, you get a $2,000 refund, all right? Now, you may pay a fee of $75 for a loan fee. You may pay $75 for administrative fee and you may pay $100 for a tax preparation fee. Of course, these fees can change. Now, you might have a total fee of 250 bucks. But you might say to yourself, you know what? I have $1,750, I'm feeling good. But the problem is that you pay the APR of around 300 percent. And might say, Eric, what is APR. Well, APR is the annual percentage rate. And it's the best way to judge a loan if you're looking at a credit card, card note, because it says everything that's</s>SAVIDGE: Those are some pretty staggering figures there. I presume this information is presented to the person before they sign on the dotted line, right?</s>AMADO: It is -- it is presented to them, the information. But in the past, there was problems where people h didn't know exactly what was going on. But you have to understand that some of the people that are getting these loans, they're not very financially astute. And they don't always know what's happening here. So, if I tell you, you're paying this amount of money, you might not always recognize it right now because you need your money. You got to pay your bills.</s>SAVIDGE: Right. And like a lot of us, we tend to just ignore the fine print and sign.</s>AMADO: Absolutely.</s>SAVIDGE: What are better tax refund options then?</s>AMADO: That's a great question. Some of the best tax refund options out there is the e-file. IRS has done a great job with e- file. About 70 percent of taxpayers are e-filing right now. And you can get your money within one to two weeks. Also, you can look into doing something like a direct deposit. And what that is, is that you can have your money directly deposited into your checking account. You had to have a good routing number and that's very easy as well. Also, you can look into electronic filing. And one more thing you can look into is the pre-paid debit card. If you don't have a checking account, you might have to pay a little money for this. You can have your money go to a pre-paid debit card. But before you get that, make sure you understand the fees associated with that card and using that card.</s>SAVIDGE: Right. The online stuff, really, really does seem to work and it does work very quickly, as you point out. Eric Amado, thanks so much for joining us this morning.</s>AMADO: Yes, appreciate it. Thank you.</s>SAVIDGE: A kid sent home from school for showing support for the wrong team. Plus, a 39-year-old is zeroing in on his dream to become starting center on his college basketball team.