Unless South Carolina taxpayers specifically ask that their state tax refund be given to them in a check or a direct deposit to their bank account, they will get it in a Bank of America debit card that could carry transaction fees.
Bank of America says use of the tax refund card is free for a purchase from a merchant and for cash back from a purchase at many grocery and convenience stores.
The Charlotte-based bank, on its website and on the S.C. Department of Revenue's website, said it will charge an ATM fee of $2.50 per transaction for withdrawals at non-Bank of America ATMs and $2.50 per transaction at ATMs outside the United States.
The bank and the revenue department websites also said one replacement card is free and, thereafter, a replacement card will cost $5. The sites also said express delivery is $15 per request and withdrawing cash from a financial institution that accepts Visa cards is free once, but $10 afterward.
Bank officials referred questions to state revenue officials.
The Department of Revenue said the debit-card program is intended eventually to replace the printing and mailing of paper checks, saving the state "significant costs" in tax dollars and processing time.
The department said taxpayers still will have the option to designate direct deposit or receive a paper check on their income tax return if they don't want a debit card. The prepaid debit card is particularly useful for taxpayers who don't have traditional bank accounts, state officials said.
Still, the introduction of debit cards affiliated with a private banking institution raised questions with local taxpayers struggling to understand why a change was made.
One concern was how secure the use of cards will be.
"Will there be debit cards sitting in mailboxes?" asked Kim Browder of Anderson.
"Do they check your ID? I bet people who steal cards know exactly where to use them. At least with a check, it's more secure."
To some, the issuance of a debit card might seem more like a gift card than part of a taxpayer's pool of savings.
"There is an encouragement to spend and not pay debt," said Jeremy Strickler, a Greenville financial planner.
Strickler, though, said the fact that there are questions doesn't mean there's no merit to the change.
The state Department of Employment and Workforce has offered its unemployment insurance claimants the option to receive their benefits on a Bank of America debit card since June 2010.
About 49 percent of the department's 239,000 claimants use the debit-card program, said Mary-Kathryn Craft, spokeswoman for the agency.
She said there have been no complaints.
Use of the card has saved the agency more than $5 million in paper, printing and mailing costs, she said.
Bank of America was selected through a request for a proposals handled by the Comptroller General's Office, state officials said.
Five banks sent in proposals and Bank of America was chosen based on low cost, services and the Department of Employment and Workforce's previous relationship with the bank, said Adrienne Fairwell, spokeswoman for the agency.
The bank is the clearinghouse for the agency's direct deposits.