Prepaid Debit Card Reviews, Complaints, Etc

Tag: American Express

Prepaid Debit Cards that Allow you to Pay Bills (Like a Checking Account)

Prepaid Debit Cards that Allow you to Pay Bills

It’s an irresistible headline. “Why a guy making $100,000 a year can’t get a bank account,” was the provocative title to a recent intriguing story by Danielle Douglas in The Washington Post.

In it, Douglas describes how a Kansas City software engineer, Zikomo Fields, pulls in six figures annually yet has to rely on an American Express Bluebird card, a checking account alternative, to handle his finances. It’s not the well-paid tech professional’s first choice, either, but the checking account alternative is his best option after being turned down by credit unions and banks, including Bank of America.

According to Douglas, this odd situation of a well-heeled, seemingly desirable customer being forced to resort to a checking account alternative financial product usually associated with low-income Americans is the result of the screening process banks use to weed out risky consumers. In the case of Fields, it all comes down to his inclusion in a database called ChexSystems. “Thousands of banks and credit unions screen would-be customers through databases like ChexSystems that document repeated overdrafts, bounced checks, unpaid balances and other behavior that could signal fraud,” writes Douglas.

No Fee Visa Card that Has all the Benefits of a Checking Account:

Chime is a new Visa card that is amazingly free (unless you use the card outside of their large ATM network). This is best alternative to a prepaid card that we’ve seen in 5+ years and offers all of the benefits of traditional bank account.

It’s a real debit card, (not a prepaid debit card which usually have a lot more fees) and people with poor credit can apply too as there is no credit check. Chime can be managed entirely from your smartphone. No overdraft fees. No minimum balance. No monthly service fees. No transfer fees. Over 38,000 fee-free ATMs, plus 30,000+ cash-back locations.

And for a limited time, earn a Cash referral bonus of $50 when you tell your friends and family members about Chime and they sign up (and they’ll earn $50 too)- details within the app after you apply! Click for more info.- you can apply online in just 2 mins with no obligation. Start by simply entering your email address and clicking “Get Started”– over 3 million customers couldn’t be wrong. 🙂 (Ad Link)

To be sure, Fields admits that he has a blemished financial record. Working as a contractor in the past meant there was a time when Fields had to overdraw his US Bank account in order to pay bills. Although he eventually was able to pay off what he owed, Fields has discovered the hard way that his name is still very much on what amounts to a financial no-fly list. As is the case with dings to your credit report, it takes a full seven years for someone’s past financial black marks to be removed from databases like ChexSystems.

There are a few results of this blunt approach to assessing the potential risk of new customers. For banks, it means that they are potentially missing out on a customer who might use their services to buy a home or a car. Potentially more consequentially, it also may cause even more consumers to flee traditional banks. Already, low-fee non-traditional financial products like the Bluebird card and prepaid cards like Chase Liquid are making it easy for customers who can’t qualify for a credit or debit card to handle their financial transactions.

As banks turn away more perfectly good customers simply because their screening process is lazy, that trend will likely only continue.

June 25, 2014
Suze Orman Prepaid Card Discontinued June 30

Celebrity financial advisor, Suze Orman, has urged countless people seeking her money guidance to get a grip and not make a purchase when they could not afford it. It’s the kind of tough love advice that makes for good entertainment, but it’s also not what holders of the Suze Orman prepaid card are being advised to do right now. Instead, customers in possession of the Suze Orman prepaid card are being told to spend, spend, spend.That’s because Orman’s Approved Card, a partnership with Bancorp Bank that was released in early 2012, is suspending operations on July 1. According to a story in The New York Times, holders of the Approved Card recently received a letter from Bancorp Bank urging them to spend whatever money remained in their accounts – anything not spent would be refunded to them.

The disappearance of the Suze Orman prepaid card, which she reportedly launched with $1 million of her own money, is not an isolated case in the once bustling celebrity prepaid card market. Basketball superstar Magic Johnson’s prepaid card will also suspend operations on June 30. Prepaid debit cards backed by the Kardashian sisters, singer Justin Bieber and comedian George Lopez have either been discontinued or are no longer prominently marketing their celebrity backing.

The suspension of Orman’s Approved Card is especially illustrative in understanding why the stampede of celebrity prepaid cards seems to be at an end. Unlike the cards offered by the Kardashians – which charged a whopping $100 to just buy the card, along with a host of other big fees – Orman’s Approved Card charged relatively modest fees, including a $3 account maintenance charge. But even with a more consumer-friendly offering, the economics of Orman’s card clearly didn’t pencil out. “You’re dealing with a lot of customers who have a lot of things go wrong, and they need their money to put milk and bread on the table,” industry consultant Rob Rosenblatt told The New York Times. “Three dollars is a really tough baseline from which to serve customers who are going to be calling a lot.”

Another factor driving celebrity prepaid cards out of the market is competition. Large financial services companies like American Express have unveiled ultra low-fee products like Bluebird and Serve. Bluebird, for instance, charges no activation fee and has no monthly account maintenance charge. Fans of Suze Orman, Justin Bieber and Magic Johnson would have to be unusually devoted to pay unnecessary fees.

June 23, 2014
American Express -Sponsored Movie Spent Premieres

Life outside the financial mainstream is getting the Hollywood treatment. On June 4^th, the American Express-sponsored documentary, Spent: Looking for Change, which profiles the challenges and frustrations of those Americans who lack traditional bank accounts and credit cards, premiered in Los Angeles and online.

Executive produced by Davis Guggenheim, who won an Academy Award for An Inconvenient Truth, and directed by Derek Doneen, Spent is available for free on a variety of websites, including SpentMovie.com as well as on the American Express YouTube channel. Simultaneous to its online availability, a screening of the film and a question and answer session with Guggenheim and Doneen took place at the Hammer Museum in Los Angeles.

The wide availability and zero cost to access Spent is a sharp contrast to the families and individuals who are profiled in the film. Lacking access to checking accounts and other mainstream financial services, the Americans highlighted in Spent are forced to pay high fees – at check cashing and payday loan outlets, for instance – and wait in long lines to do simple tasks like pay bills and cash paychecks. American Express estimates that about 25 percent of American households are not well-served by the current financial system and that those families spend an average of 10 percent of income on fees – about the amount the typical American family spends on groceries.

The film is narrated by Tyler Perry, who grew up in poverty in New Orleans and spent time living in his car as he worked to launch his career in TV and film. “I know about this issue first-hand and how expensive it is to not be a part of the mainstream financial system,” he says. “Growing up the way I did, there was no education about how important it was to be financially responsible. That’s why I felt compelled to participate in this film – to help educate others and advocate for better options.”

As a sponsor of the film, American Express is eager to highlight what it believes are its own superior options for the millions of people outside the financial mainstream. In particular, American Express is now selling both its ultra low-fee prepaid card, Serve, and itschecking account alternative account, Bluebird, at Walmart and other chain retail stores nationwide. With low (and sometimes no) fees, both products provide those who are unbanked, or simply unhappy with the available options, a new choice.

The film is part of a larger effort by American Express to not only shed light on the problems with the current financial system but to also promote change – including the development of new technologies and products that inexpensively meet the financial needs of everyone. “With the debut of Spent: Looking for Change, we hope to spark a national dialogue about re-imagining financial services as we know it today,” says Dan Schulman, who heads up the American Express Enterprise Growth unit. “Change is possible and we believe financial exclusion is a solvable problem, but it’s going to take lots of people working together, raising awareness, and investing in initiatives that help to create better, more affordable financial solutions for everyone.”

June 5, 2014
JPMorgan Launches Financial Solutions Lab

American Express just got a little competition in its efforts to appeal to those living outside the financial mainstream. On May 29^th, banking giant JPMorgan Chase & Co. announced that it has committed to invest $30 million to create the Financial Solutions Lab.

A collaboration with the Center for Financial Services Innovation, the new Financial Solutions Lab will tap the expertise of entrepreneurs, non-profits and academics to develop products and technologies to help people save more money and build better credit. The new venture is geared towards helping those who are not fully served by the current financial system. “Living outside the financial mainstream puts financial security further out of reach for one out of every four American households that rely on high-cost, non-bank services to manage their finances,” says Bruce McNamer, the CEO of the JPMorgan Chase Foundation. “The Financial Solutions Lab will bring together the best and the brightest to identify innovative solutions that help consumers increase savings, improve credit and build assets.”

Buttressing its decision to launch the Financial Solutions Lab, JPMorgan Chase and the University of North Carolina at Chapel Hill also released a white paper that illustrates the need for improved financial services. For instance, the paper notes that less than 10 percent of working American families are financially prepared for retirement while more than half do not have an adequate emergency fund. The research also shows how important savings can be as a vehicle for upward mobility. Indeed, 71 percent of kids born to low-income parents who managed to be big savers were able to move out of the bottom income quartile.

This new JPMorgan Chase initiative will, among other things, host competitions that encourage social entrepreneurs to devise ways to help encourage saving and credit building. In doing this, JPMorgan is echoing American Express’s well-publicized efforts to provide solutions to millions of so-called unbanked Americans. Besides its checking account alternative Bluebird and Serve prepaid cards, American Express sponsored a new documentary film, Spent, which shines a light on the difficulties and expense those who don’t have bank accounts or credit cards face to do simple tasks like pay bills and cash checks.

June 4, 2014
AmEx Sees Surge In Prepaid Customers

Participants at last week’s Sanford Bernstein’s investor conference in New York City could be excused if they thought they had stumbled into a political rally. Giving the final formal presentation at the “Disruptive Trends in Financial Services” gathering, American Express Group President for Enterprise Growth, Dan Schulman, made an impassioned critique of the way the current financial system functions, or doesn’t, for the 50 percent of Americans who live paycheck to paycheck.

“There’s an epidemic of people being forced to the margins of our financial system,” Schulman said, citing statistics from the Federal Deposit Insurance Corporation (FDIC) that 70 million Americans are either unbanked or under banked, meaning they either lack a basic checking account or credit card. Tens of millions more, he said, are “unhappily” banked, forced to pay ever increasing fees for checking accounts that banks offered for free, in the past.

According to Schulman, this situation has forced far too many people to pay high fees and wait in long lines just to make basic financial transactions, like paying bills or cashing a check. Schulman gave the example of payday loans that aren’t immediately repaid incurring interest rates upwards of 500 percent. The belief that there is a fundamentally more equitable way to deliver financial services than what is currently offered by brick and mortar bank branches has led American Express to launch its low-cost Serve prepaid card and Bluebird checking account alternative. Schulman went so far as to say that it was a “defining mission” of American Express “to explode the paradigm that it’s expensive to be poor.”

If that is the mission at American Express, Schulman offered some pretty strong evidence that the company is making progress towards it. He told the conference that American Express has added almost 2.5 million new Bluebird and Serve customers since the beginning of the year. That brings the total number of customers to about 9.5 million. Additionally, Schulman reported that Serve and Bluebird customers have loaded about $1.9 billion into their accounts in the first four months of the year.

May 22, 2014
AmEx Serve Cards Announcement Hits Green Dot

When American Express announced earlier this week that its prepaid Serve cards can now be purchased at 4,100 Walmarts nationwide, the stock market reacted. But as a story on ABC News points out, Wall Street was mostly interested in what the partnership means for Green Dot, a major player in the prepaid card industry.

And if the immediate aftermath of this major expansion in the availability of Serve cards to Walmart is any indication, Wall Street believes that Green Dot is in trouble. Indeed, in the two days after AmEx announced that Walmart shoppers could pick up its ultra low-fee Serve cards for $1.95 while buying groceries, Green Dot shares were down over eight percent.

As the ABC News report makes clear, this is just the latest downturn in what has been a steep decline in Wall Street’s assessment of Green Dot. Not long after Green Dot held its initial public offering in 2010, it soared to over $60 per share. The company’s shares were trading at below $20 after the Serve announcement, which also included the news that the addition of thousands of Walmarts had helped AmEx create the largest free cash reload network in America.

What’s behind this grim assessment of Green Dot’s prospects? According to Yahoo! Finance’s Mike Santoli, it comes down to competition. “Their whole business is being threatened because they collect prepaid fees off of these debit cards,” Santoli told ABC News. And the fee comparison doesn’t bode well for Green Dot. Consumers can pick up an AmEx Serve card and pay a $1 monthly fee compared to an average $5.95 monthly fee for Green Dot cards.

There’s also a perception problem for Green Dot, argues Santoli. Both AmEx and Green Dot prepaid cards are available at Walmart. “The perception here is that Walmart is throwing its weight a little bit more behind AmEx than Green Dot,” he says.

April 24, 2014