Orman’s card may not be “smarter”
NEW YORK — Don’t choose a prepaid card just because it’s from Suze Orman.
The personal finance guru recently introduced a prepaid card she touts as a “smarter way to stay debt free.” Orman says her Approved card costs just $3 a month “if you use it how I tell you to.”
But as with most prepaid cards, the amount cardholders ultimately fork over will vary significantly depending on their spending habits. Other features of the card are worth a closer look as well.
In general, prepaid cards are used as a stand-in for debit cards by people who don’t have checking accounts. The cards are advertised as a way to control spending or dodge steep bank fees. But the fees on prepaid cards can rack up quickly as well.
Here’s a closer look at the Approved card’s terms:
Fees: Its upfront cost is $3, which is line with some of the cheapest prepaid cards on the market. But after the first month, the card charges a $3 monthly fee.
ATM fees are another matter. The Approved card partners with the Allpoint ATM network, which has 35,000 machines nationwide. But customers using an Allpoint machine are still charged $2 per withdrawal, unless they set up direct deposit or a recurring bank transfer of $20 or more.
If cardholders use an out- of-network ATM, they’re charged $2 per withdrawal plus the ATM operator’s fee.
Free perks: Among unique features of the Approved card is that it gives users unlimited access to their Transunion credit reports and scores for one year. But it’s worth noting that the score cardholders receive is a Vantagescore, and not the widely used FICO scores.
Remember, free reports and scores are also available from many sources, without having to buy a prepaid card.
Credit impact: Those who’ve read about the Approved card may be confused about its impact on their credit profile.
Orman says that the Approved card is the first prepaid card to share information with Transunion. But for now, the cards do not have any impact on credit reports.
Skeptics doubt that prepaid cards will ever be included in credit reports.