Prepaid debit cards are nothing new, but the newest card on the market, from personal finance guru Suze Orman, has me taking a second look at the product in general. Prepaid debit cards can be a good alternative to both traditional debit cards and credit cards because the user can’t overspend. Once the prepaid sum is depleted, the card is rendered useless until it is reloaded. There is no possibility for an overdraft charge and there are certainly no finance charges or late fees applied to such cards. But the question I’ve always had is whether or not prepaid debit cards are really a good deal.
So what makes Suze Orman’s new product, The Approved Card, different from other prepaid debit cards? Suze’s email blast pitching the new product details the features that make her card stand out. These features include:
- Low $3 monthly fee
- Free ATM use when you directly deposit funds onto the card
- Free identity theft monitoring
- Free credit report and scores
- Online bill pay
The list goes on to highlight many more features included with The Approved Card. Since I’m not very familiar with prepaid debit cards in general, I honestly didn’t know if these were great selling points or not. The $3 monthly fee stood out to me as being a bit steep but when you compare it to Bank of America’s proposal to charge customers $5/month to use their own debit cards, the $3 fee doesn't sound so bad.
However, a checking account is different than a prepaid debit card, so I must compare apples to apples, so to speak. I visited BankRate.com’s PrePaid card search engine to find other cards to use in my comparison. It turns out that $3/month is actually a better than average deal. Most of the cards had monthly fees of $5/month or higher, but some of these cards waived the fee with a minimum monthly deposit.
It is the extras on Orman’s The Approved Card that appear to set it apart from competitors. Free identity theft monitoring and free credit report updates are nice added features, especially for someone who is using a prepaid debit card while they rebuild their individual credit.
Orman’s new card looks like a good choice for those in the market for a prepaid debit card. Do you use prepaid debit cards? If so, does The Approved Card pique your interest?