Suze Orman goes prepaid

By Felix Salmon
January 9, 2012
big fan of Suze Orman, and I'm generally very mistrustful of prepaid debt cards. So what happens when Suze Orman launches her own prepaid card?

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I’m a big fan of Suze Orman, and I’m generally very mistrustful of prepaid debt cards. So what happens when Suze Orman launches her own prepaid card?

The answer, in a nutshell: it’s the best prepaid card out there. Its fees are clear, and refreshingly absent a lot of the time: no fees to buy anything, no fee to check your balance online or over the phone, no fee to transfer money to another card, no fee to make electronic bill payments, not even a fee to close your account and get a check for the balance. I also like the way that it will email or text you every time you use the card.

So if you have some other prepaid debit card, close it, and get this one instead. It’s clearly better.

Of course, there are questions associated with this product, too. Ron Lieber is worried about Orman’s journalistic integrity, on the grounds that she has a weekly show on CNBC: “if I tried to introduce my own card,” he writes, “the ethics editor would laugh me out of the New York Times building”. I’m not particularly bothered by this, although I am a little bit uncomfortable about her longstanding move into financial products more generally, which long predates the Approved Card. For instance, Suze Orman’s FICO® Kit Platinum will cost you $49.95 — a much worse deal than the Approved Card.

And Orman’s including something vaguely similar in the Approved Card: sign up for one of these cards, and you’ll get unlimited access to your TransUnion credit report, along with your TransUnion credit score. I don’t like the way that Orman sells this as an “opportunity to save yourself $143.40″ — this is a so-called “fako” score, rather than your FICO score, and you’d have to be an idiot to pay $11.95 to get it. Especially since exactly the same service can be found for free at CreditKarma. It seems that TransUnion is making a determined push into biz-dev deals which give consumers its scores for free; that’s fine, I guess, but I’m not going to get particularly excited about it.

There are two possible problems I see with the Approved Card, both of them surmountable. The first is that as far as I can tell, it isn’t actually sold anywhere; Orman desperately needs to get some retail presence for this thing, since that’s the way the overwhelming majority of prepaid cards are sold. And the second is the Achilles’ heel of most financial services, which is the quality of customer support. When people complain about their banks or their prepaid cards, the complaints nearly always come after a dreadful experience on hold with unsympathetic and unhelpful call-center operatives. If Orman can fix that, she’ll deserve an enormous amount of praise.

8 comments

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This is a good card but it’s not the best card.

US Bank’s Convenient Cash Card, Regions Bank Now Card and the MoneyManager Card from First California Bank are all better cards. The US Bank and Regions cards have free cash deposits and withdrawals at any Branch (something only Bank prepaid cards allow for and allow for Readylink also. All three cards offer unlimited ATM withdrawals and the limits are higher than Orman’s $500 a day. MoneyManager has no limit. With US Bank & Regions since you can go into a branch its really a no overdraft check less account.

Prepaid card vendors generally don’t want customers to be able to access all their money through an ATM because then they don’t get make any money on transactions.

The Approved Card uses Moneygram and Western Union for cash reloads also and those are of two the worst reload methods since you have to fill out paperwork and there is always a chance of error as opposed to a swipe reload method supported by Visa ReadyLink and Mastercard RePower.

Posted by OuterLimits | Report as abusive

Liked your article. You spoke of 400%apr loans and 10%apr loans. Seems there is probably products out there charging 80%apr on small loans. that seems reasonable with the small amount of money and risk???

Posted by Johnson2 | Report as abusive

These pre-paid cards seem like a good way to introduce kids to plastic money, but the $3/month, which I guess is around the norm for these things, kills that idea!

Posted by Kiffmeister | Report as abusive

“I’m not particularly bothered by this, although I am a little bit uncomfortable about her longstanding move into financial products more generally.” Why “a little bit”? If Suze’s FICO® Kit Platinum is a lousy product, as you say it is, why shouldn’t you be, I don’t know, disgusted by the way she’s ripping off the public?

And why do you worry that she “desperately needs to get some retail presence” for her latest product? She’s on TV every week. She makes a lot of money. Why is it somehow important for Suze to become the Martha Stewart of financial services? Or are you just afraid of her?

Posted by AlanVanneman | Report as abusive

Felix, when are you going to follow in her footsteps and introduce the “Felix Salmon Payday Loan”?

Posted by TFF | Report as abusive

Susie Orman is not acting as a good Samaritan here, but promoting a new for profit business venture. I recall her promoting FICO score kits a while ago convincing many that Credit and FICO meant successful and rich and for that she should not be applauded. With regards to this new venture, I would have to point out that for a responsible person a Credit Card is better for two reasons
1) You have an interest free loan each month from the credit provider if you pay off the cash balance by billing date
2) The legal protections on Credit Cards are better than Debit Cards.

Posted by Sechel | Report as abusive

Prepaid cards are a great choice for many people who should not be adding to large high interest debt loads. Education on debt and the financial system continues to be sorely lacking in America. I think this post on requiring licenses to borrow is an interesting policy suggestion: http://bit.ly/tZp1Vi

Posted by SilverGray | Report as abusive

I’m skeptical of Suze’s consumer products after seeing the investment portfolios she promotes:
http://blog.covestor.com/2011/05/the-suz e-orman-retirement-hedge-fund

See also:
http://rp-pix.com/id

Posted by MickWeinstein | Report as abusive