I don’t care what anyone says, Suze Orman should be ashamed to be putting her name on a prepaid card. She’s abusing the goodwill she’s built by virute of being under the Oprah umbrella. Oprah needs to shut that down or dissassociate herself from this immoral money grab that Orman is selling to the masses.
Prepaid cards, check cashing stores, and reloadable debit cards are not the answer to your money woes. They are simply the newest money problem that you’re voluntarily signing up for. I know that these cards are targeted to the low income, uneducated, young, and uninformed consumers so let me tell you that there are many alternatives to these cards that will allow you to enjoy the protection of the Federal Deposit Insurance Corporation (FDIC). In simple terms the FDIC is the independent agency that is the insurance for bank accounts up to $250,000. Let’s be honest if you’re looking at any of these prepaid cards you don’t have that much money in the bank.
I’ve spoken to people who don’t use banks and here are a few of the excuses I’ve been told:
I don’t trust banks
What if it goes out of business all my money will be gone
They charge fees
It’s easier to use a check cashing place
I don’t need a bank account
AND … I just never bothered getting one
Well these cards and check cashing places have their own built in fees, but without safeguards. A big one is that you paint a huge target on your forehead after leaving a check cashing shop since it doesn’t take a genius to realize you likely have cash on you ... and you won't be reimbursed after you are robbed. Also, when you really look at these prepaid cards they charge fees for just about everything. A fee to enroll, monthly ‘maintenance’ reload, and to use an ATM. Not that great of a deal if you plan to use them all the time, but even more important is that they don’t build your credit history since they don’t report to any of the bureaus.
There are many reasons you may not want to use a traditional big bank (political, moral, credit issues, no convenient location, illegal, working for cash) but there are many other institutions that can be used. I recommend joining a credit union either through work or through a union in your city that you are eligible to join. Or, you can join a local FDIC insured privately held bank; these are banks across the U.S. as well as online. Here are a selection of FDIC insured banks: Alliance Bank, One United Bank, Central Bank of Kansas City, People’s United Bank, Peoples Bank, Interamerican Bank, North Milwaukee State Bank, Hawaii National Bank, Nordstrom Bank and many other local banks that offer their services to the community without onerous fees.
It's more cost effective to open an account at a bank or credit union. Especially when you take into account we are moving to a cashless society. So, either join us or have a hard time navigating life.