Thursday, January 19, 2012

Suze Orman and the Approved Card

The Approved Card is a prepaid MasterCard created by Suze Orman for everyone no matter what your credit score. The Approved Card has several fees that include but are not limited to: a $3 activation fee, a $3 monthly fee, $2 fee to speak to a customer support representative, $2 fee for non-network and network ATM withdrawals, $1 fee per transaction for ATM balance inquiries, $2 per transaction for over the counter cash withdrawal, $2 ATM declined fee, $2 fee per statement for paper statements, $1 fee per bill for paper bill check payment.

A $30 per transaction fee for bill payment inquiry is charged and there is a fee to reload cash on the card at a retailer but is free if you have direct deposit . With one visit to an ATM you can spend up to $6. During one month you could spend up to $20 in fees.

The Approved Card can be used to pay bills or make purchases and provides unlimited access to your credit report and credit scores from TransUnion. You also get unlimited free use of Allpoint ATMs across the country each month, if you make a direct deposit or bank transfer to the card of $20 or more.

The card has no interest rate and is FDIC insured. Other features of the card include identity theft protection, ATM withdrawals, free electronic bill payment, and you can keep track of spending through text alerts.

A prepaid card is a good tool to use to teach children and college students about how to use a credit card responsibly or if you have repeatedly overdrawn your bank account and need time to reestablish your payment history with the bank.

However, using this type of card keeps the 26% of Americans who are unbanked and the 34% of Americans who are underbanked in the same statue because it does not require having a bank account. Although you are not penalized if you have a bank account and use direct deposit.

A prepaid card prevents Americans from learning how to balance a checkbook, manage their bank accounts and tracking their spending. It also prevents Americans from getting additional perks that can be obtained when using a traditional bank such as rewards points, discounts on fees and interest rates, notifications about special offers, etc.

There are tons of prepaid card available with lower fees such as the American Express Prepaid Card, Perk Street Financial MasterCard Prepaid Debit Card, SilverCard Prepaid MasterCard, Readydebit Select Visa Prepaid Card with Path2Credit or Bank Freedom Prepaid MasterCard.

The Approved Card cannot be used to help increase your credit score because payment history is not reported to the credit bureaus. The disadvantages of using a prepaid debit card are: you pay additional fees; it may or may not be FDIC insured, you do not get rewards points, there are stricter guidelines regarding fraud protection, liability costs can increase quickly if the theft is not reported immediately and there are certain transactions that do not allow you to use a prepaid card such as pre-authorized charges where the full cost of the purchase is not known upfront.

You have to ask yourself why do celebrities offer prepaid cards. Is it because they really want to help their fans or they really want to help themselves. Comparison shop and read the terms and conditions before deciding to apply for a card. Decide for yourself if the Approved Card or any prepaid card is right for you.

1 comment:

Daniel Colin said...


Prepaid cards work on the theme of pay now and use at your convenience, very similar to prepaid mobile phone cards. Some prepaid cards also offer small lines of credit, which must be repaid within a short period of time. Thanks...

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