Suze Orman Introduces Prepaid Cards
It didn’t work for the Kardashians. Perhaps it will for Suze Orman.
Orman is the latest celebrity to jump into the prepaid card market. As a well-known financial adviser with a strong following, she just may have the clout to capture a significant portion of the market.
Prepaid cards have historically targeted consumers with poor credit who could not qualify for a standardcredit card. These cards were easy to get, but were loaded with exorbitant fees. That began to change last year when American Express introduced its own prepaid card with fewer fees.
There are some nice advantages to Orman’s Approved Card. It has fewer fees than most prepaid cards: there are no loading fees, no fee to transfer money to another card, and no fee to make electronic bill payments. The card comes with free identity theft protection and also gives the cardholder unlimited credit reports and scores from TransUnion, one of the three credit reporting agencies.
As with any card, consumers need to read the fine print to be aware of the fees that will be charged.
The Approved Card costs $3 to purchase and then has a monthly fee after the first month of $3. ATM withdrawals are free each month as long as they are made from the Allpoint network and you make a direct deposit of at least $20 each month. Otherwise, the ATM withdrawals will cost $2 per transaction.
If you get cash back when making a purchase at a retail store, that will cost you $2.
Your first call each month to a customer service representative will be free, but subsequent calls will be $2.
The opportunity to receive unlimited credit reports and scores from TransUnion can be beneficial for consumers, especially those trying to build their credit. However, the score that will be available will be the TransUnion score, not the FICO score that most banks use when deciding a consumer’s credit worthiness. Orman says TransUnion plans to collect Approved Card user data to determine if it should include prepaid card data on its credit reports in the future.
A debit card linked to your checking account is much better than a prepaid card for most consumers. A debit card will not have the monthly or usage fees that are common with prepaid cards, even this new one from Suze Orman. But for people who don’t have a bank account, or may have some credit problems, her card may be a good alternative.