George Lopez Prepaid Card Evaluation
Yet another celebrity has decided to get involved in the prepaid card market: comedian George Lopez. Lopez today announced a multi-year marketing partnership with Mango Financial, whose flagship product is the Mango Prepaid Card. While Lopez is not offering a co-branded card, as was the case with fellow celebs Lil Wayne, the Kardashian sisters, Russell Simmons and Suze Orman, his name will certainly be linked closely with the product. So, it’s fair to wonder: How does the Mango Card stack up, and do its terms jive with sentiments expressed by Lopez regarding his decision to partner with Mango?
“This is not only an opportunity to promote a great company with great products, but also a chance to make a difference in people's lives," Lopez said in a statement announcing the partnership. "My grandparents, a factory worker and construction worker, who raised me, taught me the importance of hard work and financial discipline to reach my goals. I’m proud to support a company that has made it easy and affordable for people to manage and save their money to help them realize their goals.”
The best way to evaluate whether the Mango Prepaid Card does indeed make it “easy and affordable for people to manage and save their money” is to compare this card to some of the best prepaid card offers on the market. As you know, prepaid cards have two different applications: 1) replacement checking account; 2) financial literacy teaching tool. The Green Dot Prepaid Card and the American Express Prepaid Card are the best for these two purposes, respectively, according to WalletHub’s Prepaid Card Report. The following analysis of the Mango Card – which uses the same methodology as the Report and is accompanied by quotes from WalletHub.com CEO Odysseas Papadimitriou – will begin with a direct comparison to these products.
- Replacement Checking Account: The Green Dot Prepaid Card is free to use as a replacement checking account, whereas the Mango Card will cost $10.66/mo. (4 ATM withdrawals at $4.33 each – includes average ATM owner surcharge; minus $5/mo. in earned interest; minus $20 direct deposit bonus spread over 12 months).
- Financial Literacy Tool: The American Express Prepaid Card costs $6.66/mo., whereas the Mango Card costs $13.58/mo. ($5 monthly fee + 2 ATM withdrawals; minus $0.08/mo. in earned interest).
Odysseas Papadimitriou (OP): “While the Mango Card does not charge a maintenance fee for months that you load at least $500, the fact that you have to pay $2 per ATM withdrawal regardless of the ATM in addition to the average ATM owner surcharge fee of around $2.33 means that it will be prohibitively expensive when used as either a replacement checking account or a financial literacy teaching tool. It’s just unfortunate that these high fees completely wipe out the 6% APY that the Mango Card offers on balances up to $5,000 for cardholders with direct deposit.”
- 6% APY: A Mango Prepaid Card can apparently serve as a replacement savings account as well, since funds up to $5,000 will grow at an annual rate of 6% for cardholders with direct deposit (2% otherwise). Funds above $5,000 get a 0.1% APY. Keep in mind, however, that this is a promotional offer, so there’s no telling how long you will benefit from the good kind of interest.
- Direct Deposit Bonus: You get a $20 bonus for starting direct deposit within 90 days of account opening and having a monthly deposit amount of a least $50.
- Free Customer Service: You won’t be charged for customer service, whether it’s via phone, online chat, e-mail, or snail mail.
OP: “I love the Mango Card’s 6% APY, not only because it’s over 33 times the current national average for savings accounts, which is 0.18%, but also because it encourages people to hold onto their money for longer instead of just spending whatever they bring in each month. I’m also all for customers being able to ask questions about their accounts for free. People are inevitably going to have questions and it’s unfair to use this against them, especially since confusion is often the result of unclear terms or marketing. In this regard, the Mango Card shines in comparison to competition like The Approved Card from Suze Orman, which only gives you one free customer service call each month and charges $2 for each subsequent call.”
- Renter’s Insurance: While you might assume that the renter’s insurance advertised in conjunction with the Mango Card would be free for cardholders, it’s completely unclear whether the price is better or worse than getting renter’s insurance independently.
- Investing Services: It seems as if Mango is just funneling business to Goal Mine, an investing service that matches you with a mutual fund or savings account, as the service is free whether or not you have a Mango Card.
- No “X” Fee: Mango Card marketing emphasizes the fees that it does not charge, including no sign-up fees, no card shipping and handling fees, no activation fee, no card to card online transfer fee, no bank transfer fee, no direct deposit fee, and no fee to check your balance via text message. The problem with this approach, which a number of other issuers employ as well, is that many of these fees are hardly ever charged for prepaid card use or are simply the same fee reiterated a few different ways. For example, instead of saying “no initial fees” or no “one-time fees,” Mango says “no sign-up fees,” “no card shipping and handling fees,” and “no activation fee.”
OP: “Card issuers like to list catchy features, counting on people not looking into them too deeply before signing up. They’re also fond of overstating the things they do not charge for. This is unfortunate because it leads to misconceptions amongst consumers. For example, people are already stating in WalletHub forums that Suze Orman’s prepaid card helps your credit score, which is most certainly not the case – not with Suze’s card or any other prepaid card.”
- High ATM Withdrawal Fee: The Mango Card does not offer free ATM use. A $2/withdrawal fee will be assessed no matter what ATM you use.
- Balance Inquiry Fee: It’s interesting that while the Mango Card does not charge for account balance inquiries made via text, online, or the Mango iPhone app, inquiries made via ATM, automated phone system, or customer service representatives cost $.50 each.
- No Online Bill Pay: Unlike most other prepaid cards, the Mango Card does not provide users an online bill pay feature. While the fact that the Mango Card is on the MasterCard network means that you can use your card number to pay bills, like with any credit card or debit card, some companies only accept checks or money orders. The Mango Card therefore comes up short as a replacement checking account in this respect.
OP: “While the Mango Card’s cons aren’t many in number, they are quite important given that there is little reason to get a prepaid card that doesn’t allow you to access your money inexpensively or that makes it difficult to pay certain bills.”
OP: “Overall, the Mango Card seems to be an expensive option, albeit one with trendy branding. Mango doesn’t seem to be trying to hide anything about its terms or services, which is, of course, a good thing, but when you really consider how the fees add up for common usage, there’s no escaping how costly it will be. My advice: Get a Green Dot or Amex Card and put the money you’d save toward something like utility payments, a gym membership, or a trip to the movies. An extra $10 a month can really come in handy.”
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