You've probably seen the ads for instant tax refunds. But credit counselors warn they're really loans that often have costly fees attached.
Richard Pittman with the Consumer Credit Counseling Service says in most cases a refund can be wired to you within 10 days anyway. But he says, for a few people an early refund check may be worth the extra fees.
Pittman: It's good for a very small percentage of people. If I have my house in foreclosure or I'm unemployed or I'm out on disability and getting this $6, $900, $1200 five days sooner so I can pay the rent-that could be a valuable service.
Pittman says there are risks to the loan checks. For instance, if the tax preparer makes a mistake and the refund is reduced, then you must pay the difference back. He says failure to pay that back could hurt your credit.
Earlier this year, tax preparer Jackson Hewitt agreed to pay $5 million to settle a lawsuit filed by then state Attorney General Bill Lockyer. The state alleged the company marketed the instant refund checks mainly to low income customers.
