The onslaught of celebrities putting their name on a prepaid card continues.
Justin Bieber has entered into a partnership with BillMyParents on a new prepaid debit card aimed at teenagers.
Bieber will use his social media army, reportedly comprised of 30 million Twitter followers and 48 million Facebook fans, to help promote the SpendSmart prepaid debit card. Bieber will produce a number of videos underscoring the need for responsible spending by teenagers. But he will also offer these cardholders the opportunity to win
some unique experiences.
The card is a product of BillMyParents, a website that claims to be a responsible teen spending company.
The card has a monthly fee of $3.95 as well as some other possible charges:
- loading charges of $2.95 from a debit or credit card; $0.75 from a checking or savings account.
- replacement fee of $7.95
- ATM charges of $0.50 per balance inquiry and $1.50 per withdrawal
- if the card is inactive for 90 days, there is a $3 inactivity charge
Bieber is just one of many celebrities to put his name on a prepaid card. Others include Magic Johnson, the Kardashians, Suze Orman and even cartoon characters. Issuers such as American Express and Chase have entered the market in the past year.
Thanks to regulations and legislation on credit cards, banks are turning renewed attention to prepaid cards. These cards have fewer regulations than credit cards and banks are embracing prepaid cards for needed revenue.
Competition for the prepaid market is growing. Consumers loaded approximately $57 billion onto prepaid cards in 2011, and loads are projected to reach approximately $82 billion in 2012, $117 billion in 2013, and $167 billion in 2014, according to the Mercator Advisory Group.
Currently, there are no government regulations and consumer protections on prepaid cards--debit and credit card rules and regulations do not apply. But that may soon change. The Consumer Financial Protection Bureau is investigating the fees and practices of prepaid cards and seeking input on ways to enforce safety for consumers.
