The best way to evaluate this card is to compare it to 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. A recent WalletHub Prepaid Card Study identified the Green Dot Prepaid Card and the American Express Prepaid Card as being the best for these two purposes, respectively. Using the same methodology, we can determine how the Approved Card from Suze Orman stacks up. The evaluation of the Approved Card below is also accompanied by quotes from WalletHub founder and CEO Odysseas Papadimitriou, a former Capital One executive:
The Cost
- Replacement Checking Account: The Green Dot Prepaid Card is free to use as a replacement checking account, whereas the Approved Card will cost $3.25 per month ($3 monthly maintenance fee + $3.00 one-time purchase fee spread over 12 months).
- Financial Literacy Tool: The Green Dot Card costs $5.95/mo., the Amex Prepaid Card costs $6.66/mo., and the Approved Card costs $3.25/mo., making it currently the best option for teaching young people how to manage their money.
Odysseas Papadimitriou (OP): “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. However, there’s a fee floor, so to speak, which means this card will always cost you something.”
Pros
- Identity Theft Protection: The Approved Card provides a service through TrustedID that monitors your personal information and alerts you about any suspicious activity. This is undoubtedly beneficial for consumers.
- Emergency Fund: This feature, which allows users to set aside money that cannot be spent by accident (you have to contact the Approved Card people first), is interesting in that it can help people add some discipline to their spending and budget more effectively. However, all you have to do is ask in order to use your money, so inconvenience is the only impediment to overspending that it really provides.
OP: “Consumers often worry about identity theft, and the TrustedID service not only helps safeguard one’s money, but it also offers some peace of mind. The Emergency Fund feature also makes budgeting a little easier and overspending a bit more difficult – good things when you consider the rate at which people are adding new credit card debt these days.”
The Marketing Fluff
- Suze’s Advice: Suze Orman’s advice may very well be helpful, but it’s definitely not personalized and it’s unlikely to be anything you can’t find elsewhere, so I would not count it as a real reason to get her card.
- The Approved Dashboard: Just a nice-sounding way to market their online account management, which all major prepaid cards offer.
- Teach Your Kids Financial Responsibility: This is indeed a reason to use a prepaid card, but Orman’s card doesn’t provide extra features relative to the competition to help promote this objective.
- The Credit Project: It appears that this is just an anonymous information gathering program that allows TransUnion to determine whether prepaid card information should impact one’s credit score two years down the road. It therefore doesn’t do anything for cardholders.
- Money Tools: Online and mobile account management is nothing unique. The same holds true for the card sharing and bill pay features highlighted on the Approved Card’s website.
OP: “The fact that so many features do not provide any substance and can be classified as marketing fluff is problematic when you consider that Orman has made a career out of helping consumers better understand their finances and make good financial decisions.”
Cons
- TransUnion Services: TransUnion already gives credit reports and scores away for free, so consumers don’t really get anything out of this feature. In fact, cardholders only gain added risk, given that after a year, they will be charged $11.95/mo. for the service.
- Customer support cost: You only get one live-agent customer support call per calendar month ($2.00 per call thereafter) with the Approved Card. Both the Green Dot and Amex cards offer unlimited free live support.
- Complicated Fee Structure: The Approved Card charges 20 different fees, while the Green Dot Card has only 8 different fees and the Amex Card has only 1 fee.
OP: “Not only are there more fees to worry about with Orman’s Approved Card than with other leading prepaid card options, but you have to pay extra for more than minimal customer service, which means that this card could be somewhat difficult to manage. The complicated fee structure merely underscores the need for regulators to step in and limit the number of different fees that prepaid cards can charge to five. What’s more, the only real reason TransUnion services are offered is to garner new subscribers after the free one-year introductory period concludes.”
Overall
OP: “Overall, this card is a decent new option, which could be the least expensive choice for certain types of consumers. However, the sheer number of different fees that it charges, the conditional assessment of many of these fees, and the fact that many of the card’s purported features are simply marketing fluff means that it’s neither as useful nor as easy to use as you might think. Orman does appear to have made a greater effort to provide a beneficial financial product than other celebrity endorsers have in the past, and she should be commended for that. Consumers should not overpay for branding though, which means that they should only get this card if it represents the least costly option available.”