Personal finance author and TV personality Suze Orman has launched her own prepaid debit card that charges low fees, compared to similar offerings on the market, and is tied to a unique pilot program with TransUnion, one of the three credit bureaus.
Oman’s “The Approved Card” MasterCard charges $3 a month in addition to other expenses, but unlike some celebrity-promoted cards, its fee structure is considered reasonable and the card offers some extras.
It will compete with the widely popular Walmart MoneyCard. It also charges a $3 a month “maintenance” fee in addition to a list of transactions costs.
Consumers should carefully review a prepaid debit card’s cost structure, which can be extensive. Prepaid cards have come under fire from consumer advocates for excessive and hidden fees. Celebrity-backed cards are some of those that have drawn criticism.
Orman’s card extras include free access to credit scores and reports from TransUnion, backing from FDIC-insured Bancorp Bank, and free identity theft protection from TrustedID.
The card also carries Orman’s reputation as a trusted personal finance expert with a loyal television following, including those who catch her regular stints on CNBC and alongside Oprah Winfrey.
A key aspect of Orman’s vast personal investment in the prepaid card market is a pilot program with the credit bureau TransUnion. The 18-24 month experiment will collect spending data from The Approved Card customers.
This information will be incorporated into a customer’s credit score.
However, it is uncertain how debit card spending habits will affect a person’s traditional credit score – which is based on an individual’s history of making payments on loans, the percentage of available credit being used and how long the individual has used credit. Debit card transactions have never been part of credit scoring by FICO Inc or its competitors.
Prepaid card customers typically have poor or little credit backgrounds, or in some cases, distrust banks enough to put up with the extra fees. Parents also use prepaid debit cards for their teenagers or young adult children to better control their spending habits.
Consumer Report has given Oman’s card an initial passing grade.
“Our financial services experts reviewed the terms and conditions of the card, and found that overall, its fees are in line with the better cards in the marketplace,” wrote Maggie Shader for ConsumerReports.org. “As is the case with many prepaid cards, the Approved card’s fees are lower if the cardholder sets up direct deposit or bank transfer to fund the card on a regular basis.”
Here are the fees associated with Oman’s The Approved Card:
- $3 monthly fee (first month is waived).
- $2 ATM withdrawal fee, unless you set up direct deposit or a bank transfer.
- $1 ATM Balance inquiry fee, unless you set up direct deposit or a bank transfer.
- $1 ATM transaction declined fee, unless you set up direct deposit or a bank transfer.
- $3 card replacement fee.
- $2 fee per paper statement.
- $1 fee for bill pay by check.
There is no fee for speaking to a live customer service rep for the first call each calendar month – after that it is $2 per call. There is also no fee for paying your bills electronically or to close your account.