If you're one of the last-minute shoppers wondering how you're going to pay for it all, holiday loans may tempt you.
It's the latest twist on something the major tax prep firms have been doing for years — after January first. They figure out your refund, and lend you that amount at a high interest rate. You pay them back when Uncle Sam's check arrives.
But holiday loans are available in December. Instead of a W2 form, you bring in a pay stub. The tax firm estimates your refund and lends you that amount.
"These holiday loans in particular are marketed to people at a time when they are probably most vulnerable," says Mark Winston Griffith, executive director of the Neighborhood Economic Development Advocacy Project in New York City.
Consumer advocates have long criticized the tax season loans. Interest sometimes tops 300 percent — that means a $100 loan can cost $400 to pay back if it is held for a year.
"They're offering a very bad product," says Griffith. "And what's worse is they know they're offering a bad product."
But there's another critic.
"In our assessment, this product is really not a good value for consumers," says Mark Ernst, CEO of H&R Block talking to investment analysts on Feb. 24, 2006, about holiday loans offered by a competitor, Jackson Hewitt. "This looks like another variation on refund loans, only worse. That was our judgment about it."
But H&R Block started making holiday loans, too, for business reasons.
"I mean, it's very clear to me, our intent is not to cede the early season to any competitors," says Ernst.
In a statement, H&R Block tells NBC News: "Consumers have demonstrated there's a need for short-term, unsecured loans and we're meeting that need at half the cost of the competition."
Half the cost of the competition may sound good, but H&R Block's best holiday loan deal still costs 36 percent interest.
Jackson Hewitt said it goes beyond federal disclosure rules by providing borrowers "additional verbal and written disclosures."
For holiday loan customers, 'tis the season to be jolly — and beware.