Beware of the H&R Block Emerald Card


So tax season is quickly approaching, and with that comes what many would call opportunistic offers for tax-related services.

The most recent advertisement I’ve seen is from H&R Block, which is offering to put your tax refund on a prepaid MasterCard debit card via its “H&R Block Emerald Card.”

They’ll even give you your tax refund without having to pay tax preparation fees out-of-pocket via what they refer to as a “Refund Anticipation Check.”

That doesn’t mean you won’t pay them, it just means they’ll be deducted from your refund so you don’t have to pay them directly.

Hard to Get Cash Out Without a Fee

  • A big negative to Emerald is the $3 ATM fee
  • Which is assessed to all cash withdrawals
  • The one loophole to getting cash back for free
  • Is to request it while shopping at a grocery store but make sure it’s free!

The first red flag, and clearly the biggest negative to the Emerald Card, is the fact that the balance on the card cannot be redeemed for cash.

Well, it can, but if you do wish to withdraw cash from the card balance, you’ll be subject to an ATM fee of $3.00 per withdrawal, along with any fee the ATM operator charges. And you may also be charged $1.50 per ATM denial.

The only way you can get money without a fee is via cash back from the store, though H&R Block does warn cardmembers to watch out for merchant fees.

For example, you might be able to get cash back at the grocery store during a purchase without paying any fees. It might not be that convenient, but at least it might be free.

Also watch out for the ATM balance inquiry, which will set you back $1.50 from H&R Block and potentially even more from the ATM operator. Instead, check your Emerald Card balance via the smartphone app or via the online account access for free.

Update: They now allow you to get cash via a check request or a one-time ACH. But if you don’t have a bank account you could be looking at fees via this route as well.

Watch Out for the Monthly Inactivity Fee

  • If you go two months without any activity
  • Such as no credit or debit actions
  • A monthly inactivity fee of $4.95 will be assessed
  • So you need to use it or lose it

Additionally, the H&R Block Emerald Card has a so-called monthly inactivity fee of $4.95 per month after two consecutive months of no activity, so you better use that card or you’ll start losing money real quick.

Not to mention the fact that the Emerald Card may not work at gas station pumps, so you’d have to walk into the gas station and ask the attendant to swipe the card to purchase gas.

Of course, H&R Block views it all a bit differently, claiming the card actually provides the convenience and security of a debit card, without the aggravation of check cashing fees.  So it’s clear who the card is aimed at, the underbanked.

And that may have value to some who are being charged even more via other less savory services.

Fees You Won’t Be Charged with the H&R Block Emerald Card

  • They don’t charge a fee for direct deposit
  • Or to spend money at merchants via signature or PIN
  • There is also no monthly fee (unless inactive for 2 months)
  • And no set-up fee

The funniest part about the card is the fees they don’t charge. They apparently don’t charge a fee to make a purchase (thank goodness), or a fee to request a card with your name on it. Wow!

There’s also no fee to call customer service (thanks?) and no fee for text message updates. Okay…

However, they do charge for bill pay transactions, which can be a big negative if you use it to pay recurring bills monthly.

To me it seems a little silly to put yourself in a position where you stand to lose money through unnecessary charges, especially when you have the opportunity to ask for a check at tax time via services like Turbo Tax and even H&R Block!

After all, if you deposit the money directly into an existing checking or savings account, you can use the money via your debit card just the same and avoid the fees altogether, while maintaining complete control over your hard-earned money.

But I guess that’s the rub. This card is aimed at folks who don’t have a bank account and thus need another way to keep their tax refund safe and sound.

The card also allows holders to add money via direct deposit, so in a sense it can be used as a bank account for those lacking one.

And as mentioned, there are worse methods out there for sure.

Consider Other Alternatives Beyond Emerald Card

  • While Emerald might not be the worst option available
  • The prepaid space is getting pretty crowded
  • And you might be able to find a better deal with fewer fees
  • So be sure to shop around and study all the fees carefully!

There are also better alternatives to the H&R Block Emerald Card these days, such as American Express Serve , Chase Liquid, and countless other prepaid cards.

I believe Serve even offers $20 if you have your tax refund direct deposited into an account, so you can get ahead there if you are assessed fees in the future. And you can withdraw money for free at some 24,000 MoneyPass ATMs.

Or you can deposit the money into a Schwab One Individual Brokerage plus Schwab Bank Investor Checking account and get all your ATM fees reimbursed.

Finally, you might be able to find a local bank or credit union willing to add you as a customer without any monthly fees.

In other words, there are probably better alternatives to the H&R Block Emerald Card, so be sure to shop around before you commit.

If you’re wondering where to get your hands on the Emerald card, you can obtain one at a participating H&R Block tax office or request one online during your tax preparation with H&R Block.

(photo: martinroell)

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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