Suze Orman has really lost my respect with her latest stunt. Now she’s come up with a pre-paid debit that seems to do more harm than good. We’ve all seen the Rush card and maybe you know that the Kardashians came out with their “Kard” which eventually got run out of town. For heaven’s sake, I even remember Suze telling them to do away with it.
“KIM there is no reason for you to SKIM them kids- shame shame shame. Come on gals, pul (sic) it off the market and put your name or image on something that is great.”
Hypocritical much Suze?
I would go into my own extended diatribe about this but let’s take a look at what others have said about her new moneymaker:
“Orman’s Approved card has a pretty low basic fee structure as long as you regularly deposit money onto the card and use one of the over 35,000 ATMs AllPoint has nationwide,” said Odysseas Papadimitriou, the CEO of card comparison website CardHub.com. “However, there’s a fee floor, so to speak, which means this card will always cost you something.” Some cards, including one from GreenDot, are free to use if certain types of payments, like a paycheck, are directly deposited onto it.
With the Approved card, fees are assessed when the customer loads the card with money; the minimum amount to place on a card is $20. Electronic transfers and direct deposits are free, but consumers cannot post the amount of a paper check onto the card. Loading cash onto the card costs from $3.50 to $4.95 because customers must rely on MoneyGram or Western Union to transfer the funds.
Yet for the millions of Americans who cannot afford or simply don’t use traditional branch banking, the card offers a viable alternative to that other form of plastic — namely a credit card. Approved also comes at a time when credit card companies are ramping up offers to spur consumer spending again.
So this card has to be fee-free, right? Wrong. Simply purchasing Orman’s Approved Card costs $3. Then, there’s a monthly fee of $3, but the good news is the first month’s fee is waived. The card is associated with ATMs in the Allpoint network, which has about 37,000 machines nationwide, and costs $2 per transaction, $1 to check a balance and another $1 if the card is declined by the ATM. Customers can avoid these fees, however, by making a direct deposit or bank transfer of at least $20 a month. One more note — loading cash onto the card costs from $3.50 to $4.95 because customers must rely on MoneyGram or Western Union to transfer the funds.
Out-of-network ATM withdrawals will always cost $2, plus any extra fees charged by the ATM’s operator, and in order to do a cash-back transaction at a store or retailer, you’ll have to pay $2 each time. Got a question for the bank? You get one free call to a live customer service agent per month, but any call after that will cost $2. And if you still like receiving those traditional paper statements, that’ll cost you another $2 per statement. Replacing your Approved Card will cost $3.
By definition, debit and prepaid spending should not be on your credit report. Anyone who thinks otherwise is living in la la land. But does that stop Suze from using the credit project thing as a selling point? Nope. In her interview with Huffington Post, she says,
“Middle-class Americans…don’t want a credit card in their wallet because don’t want ability to get themselves into trouble again,” she said. “The problem with that is if you spend money on debit or cash, it doesn’t report to the credit bureaus so it doesn’t give you a FICO score.” “I wanted to create (a scenario) where people who pay with debit and cash are rewarded…”
This card will not help your credit score or report. Don’t take my word for it. In this interview with Fox Business, Jon Ulzheimer points out that the fine print from the Approved Card site:
“The information we share with TransUnion concerning your Approved Card account will not appear in your credit report.”
“At the end of the day, it’s still $36 a year to have access to your own money,” added Ulzheimer. “I can go to a credit union tomorrow, stick five dollars in an account, open an account, get a debit card and it’s going to cost me the grand total of nothing.”
As you can see, I’m not the only one puzzled by Suze’s latest move. Suze has totally lost my respect and while I wish her well, I do hope that she reconsiders this latest offering. This is likely to be a PR nightmare for her brand should her audience and the media push for the product to change as they did with Verizon, GoDaddy, Netflix and Bank of America.
Oh, and Suze’s reaction to the blowback? Less than graceful, in fact it was the nightmare I predicted and she only stirred the ire of the same bloggers she has at one time or another recruited to push her products and brand.
20andEngaged has the full blow by blow with screenshots from all sides engaged in tonight’s virtual scuffle so go take a look and see for yourself!
If you disagree with Suze’s new pre-paid debit card, why don’t you do her a favor and tweet your disgust to @suzeormanshow? She seems to think that smart people agree with her and we beg to differ.