Suze Orman's Approved Card Gets Mixed Reviews and Controversy
On Monday, personal finance expert Suze Orman launched her prepaid debit card, The Approved Card From Suze Orman. Suze is putting all her credibility behind this product launch. "I didn't just approve this card," said Suze. "I created it."
Reviewing the Featues
Suze highlighted several features of the card on her website. Below is an analysis of each feature compiled from reviews from various media outlets and personal finance bloggers
The Fees are Competitive
According to Fox Business, compared to other checking account alternatives, The Approved Card offers competitive costs that best other celebrity prepaid cards. Cardholders pay a $3 purchase fee for the card and have to pay a $3 per month maintenance fee (which is waived for the first month). Using the card to make withdrawals from a Non-Allpoint ATM costs cardholders $2 per withdrawal and over the counter withdrawals cost cardholders $2 per transaction. For a list of all fees associated with The Approved Card, take a look at the Fee Schedule.
Suze has faced a lot of backlash due to all the fees associated with her card. As Jeremy Vohwinkle from Generation X Finance reminded his readers, Suze Orman is a personal finance expert who encourages people to get out of debt and avoid excessive fees. Throwing money towards debit card fees means consumers throw less money into eliminating their debt. This fact has raised some objections among personal finance experts and bloggers.
You Get Free TransUnion Credit Scores
For the first year, cardholders get access to their TransUnion Credit Scores for free.
ABC News pointed out that consumers can access their credit reports once a year for free by going to AnnualCreditReport.com. People can also access their credit reports from sites such as Credit Karma.
The Approved Card is Part of The Credit Project
Suze has embraced the idea that activity on debit cards should count towards a person's credit score. Since they aren't currently included in your credit report, Suze has set out on a mission to do that. Your activity on The Approved Card will be reported anonymously to TransUnion in an attempt to help Suze accomplish this goal. The Approved Card is the only card available that is part of this type of project.
Phil Taylor from PT Money highlighted the fact that The Approved Card will have no impact on cardholder's credit scores. He also made it clear that he believes The Credit Project is likely to fail due to the fact that prepaid and debit cards do not demonstrate someone's credit-worthiness.
You Can Establish an Emergency Fund
Cardholders have the ability to set up an emergency fund using their card. This way they can be prepared for unexpected expenses.
SmartMoney believes the emergency fund aspect of the card could be helpful, but also pointed out that there are currently no interest rates associated with the emergency card feature. Interest rates are supposed to be implemented later this year.
You Can Stay Debt Free
Since the card is a prepaid card, provided you are debt free when you get the card, you will not be able to spend more than what is in your account, making sure you don't go into debt.
MSNBC highlighted the fact that The Approved Card is similar to other prepaid cards in regards to keeping people from going into debt. In an interview with MSNBC, Gerri Detweiler from Credit.com made it clear that The Approved Card is "a very typical prepaid card."
The Card is FDIC Insured
Deposits up to $250,000 are insured by the FDIC. Bancorp Bank, the card issuer, is a member of the FDIC.
As MoneyCone pointed out, FDIC insurance is common among most banks. The fact that this card is FDIC insured doesn't really set it apart from other debit cards offered by other banks.
Cardholders get Free Identity Theft Protection from TrustID
Identity theft is a huge issue today but with The Approved Card, cardholders will have access to free identity theft protection through TrustID.
The New York Times highlighted Suze's statement that identity theft protection services tend to be costly. This service adds value to the card if cardholders had originally planned on purchasing identity theft protection.
One of the main responsibilities of personal finance bloggers is to report on product launches such as The Approved Card and give honest feedback.
A few of the top bloggers on the Wise1000 publicized their thoughts on the card and consequently had a run in with Suze Orman on Tuesday evening. (The Wise1000 is Wise Bread's authoritative listing of the top personal finance blogs.)
Here are a few of the highlights from their interactions with Suze:
Many personal finance bloggers were shocked by the dialogue from @SuzeOrmanShow. Phil Taylor of PT Money took the biggest hit in the scuffle. Phil is well-known throughout the personal finance blogging community. He was the organizer behind the personal finance blogging community's first ever Financial Blogger Conference and is in the process of planning FinCon 2012. Phil has been featured on numerous sites including MSNBC, U.S News & World Report, TurboTax, and Fox Business.
First, regarding Suze: I like her and I respect her for her work. No doubt she's helped millions of people throughout her career. I consider her a teammate in helping people to improve their financial lives. She does it through her classes, books and TV shows. I try to do it through my little blog.Second, I'm not one of these people who believes in inherently bad financial products. I actually like prepaid debit cards for certain situations. I even promote them on my site. I realize some people are "unbanked" for whatever reason and can't get a regular bank account, thus, the prepaid debit card comes into play. But only as a short-term solution until a bank account can be opened. The goal, in my opinion, should always be to get the unbanked folks off of fee-based products and into the mainstream banking arena.So my review was never about Suze or prepaid cards in general. My review was about how the card is being marketed. It is being marketed as a long-term solution to the unbanked as well as to the middle class (wanting out of credit card debt and disillusioned by big banks) and to the 99% (who've had it with the fees). This attempt to promote the card amongst the banked is what really fired me up. Additionally, the fees on the card actually make it just on-par with the best prepaid debit cards already on the market. So the card is not exactly revolutionizing the prepaid debit card market for the unbanked.As I said above, I like Suze, but I was obviously shocked and disappointed that she chose to respond to our tweets and blog post the way she did. She's since apologized, and I accept that.The community response was awesome. I think the dismissive tone of Suze's tweets really rallied the community. It was as if she was telling us all that our opinions didn't matter. That obviously upset a lot of people.
As seen above, Suze did apologize for the dialogue. She maintains her own twitter account, so all tweets from @SuzeOrmanShow are written by Suze. Wise Bread reached out to Suze for additional comments on both her card and the Twitter exchange, but she declined to comment further at this time.
What do you think of Suze Orman's Approved Card? Will you sign up for it? And what about the Twitter feud? Share your thoughts with us in the comment section!