Suze Orman's Approved Card Gets Mixed Reviews and Controversy

by Ashley Jacobs on 12 January 2012 24 comments
Photo: Morgan

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."

Feedback on the card has been mixed and even sparked a Twitter war between Suze and several top personal finance bloggers (more on this below).

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.

The Personal Finance Blogger Community Reacts

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:

ARTICLE CONTINUES BELOW

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.

Phil's blog is the 26th most respected blog on our chart, and he is the 16th most active member of our blogger community. Here's what Phil had to say about the exchange:

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.
Briana from 20 and Engaged "was completely disheartened" by the exchange but also felt that the fact that the pf blogger community supported each other during Suze's attack "showed loyalty and true camaraderie." (Briana is the top contributing member in our blogger community.) 

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!

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Guest's picture
Long

I am one of Suze's Twitter followers and was wondering what that apology tweet was about. That said, I do think that there are other solutions that Suze and whomever she works with could come up with to help people build their credit.

I would never sign up for that card and would never promote it myself. I don't really know the details of the card other than what is written here, but it seems that the built in fees are a bit counterintuitive. I'm guessing that most people who would need The Approved Card would not really have the means to have a large balance in that account...this makes the $3 a month maintenance fee akin to payday loan interest rates. It's a tough sell.

Ashley Jacobs's picture

I do like the concept behind The Credit Project. Whether or not it will move from a project to a reality is another story. Like you mentioned, there are probably other solutions Suze could come up with to help people build their credit. It may be a good idea for her to work on those solutions as a back-up plan should The Credit Project not work out.

Step Away from the Mall's picture

Great post. To answer your questions, I think her card is one of the better prepaid cards, but that's like saying an elementarty school teacher is the tallest one in the classroom... I could not believe Suze's tweets, and there are no excuses for it, but it was good to see her apologize to PT and, to use her words "anyone I called an idiot." She saw her baby getting called names and overreacted. The apology still doesn't make the card any better though. Overall I give it a "meh."

Ashley Jacobs's picture

Thanks! I agree, the Tweets were shocking. I loved how the pf blogging community came together to support each other though. I think you are right, she saw something she worked hard on getting criticized and she didn't take it well. I can relate to that, I get upset when something I work hard on gets criticized. But I think as everyone has seen through this, there are ways to handle criticism and ways not to handle it.

Guest's picture

I love when she apologizes for calling people idiots. Classic! The fees are competitive, though. At least it gives the celebrity cards a run for their money!

Guest's picture
Guest

I belong to a credit union and use their debit card. Every few years, repeat, years, I have to replace the card. The last time, it cost $5.

I am surprised neither Phil nor Suze made even passing reference to credit unions.

Andrea Karim's picture

Wow, how insecure does she have to be to go and call Phil an "idiot"? I've never been a terribly big fan, but that's petty behavior from a multi-gazillionaire like Suze.

Guest's picture
Guest

Card fees are better than some. For the unbanked, though, a better option would be a card which carries the option of interest-bearing savings with direct deposit. Orman's card will also have the usual $3.95 fee to load the card, if direct deposit is not an option.
Those on government transfer payments can get a US-sponsored card with extremely limited fees. Otherwise, a prepaid debit card should be used only for Internet purchases, to limit liability from criminal activity.

Ashley Jacobs's picture

Hopefully the plan to have interest rates on the savings accounts associated with the card will come to fruition.

Guest's picture
BPX

The hypocrisy is so deep, I had an overwhelming urge to immediately check my credit report. Suzy.....really?

Guest's picture
Guest

Can someone please explain to me how this differs from a regular chequing account that doesn't come with an overdraft? I pay the same amount for my account, get the same features and enjoy the same knowledge that I can't over draw because there's no ability to... are people that desperate to get accounts that have celebrity names attached? because that's sad.

Guest's picture
Guest

It concerns me that a "financial" planner would encourage someone to purchase a product which they have a vested interest in. Anytime there ia "brand" name attached to a product then the powers behind the scene are not going to allow it to be used by the mainstream unless there is a profit to be made. I think it is disingenuous of Ms. Orman to act as though this product has any real value other than to set a limit on the amount of cash you may have access to at any given time. I could do that with the savings account I currently have in a credit union.

Guest's picture
Jodie H.

Great post! The best thing to come out of this is the conversation. People are talking about the pros, cons and alternatives to getting affordable and safe banking products to folks who may not have or don't know how to get access to them. I love how the financial information highway has really opened up over the last week or so and people are finding different sources of financial tips and advice.
Thanks for adding to the discussion.

Guest's picture
Jay Gould

Suze Orman's card is not a bad prepaid card, but it is nothing more than that either. It is not even the best prepaid card out there, as that distinction belongs to American Express' prepaid card, which comes with no monthly fees at all.

But what really bothers me is that Orman advertises her card almost like the solution to all of your financial problems, provided "you use it how I tell you to." The thing is, if the "unbanked," who constitute the vast majority of prepaid users, were always doing what they were told with their finances, they would never have been cut off of the banking system and come to rely on prepaid cards in the first place. http://blog.unibulmerchantservices.com/why-suze-ormans-prepaid-card-is-a-non-event

Guest's picture

Well, I have a bank account AND just got her "Approved Card" in the mail today! Regions Bank charged me $10 for my account and $4 for using my card... Suze only $3. I saved $11! Now, I left regions and went to a Credit Union where my account is FREE however, I never use it. I only use that as a savings. I DO NOT carry that Credit Union card on me. That's what Suze's "Approved Card" is for! If my card is stolen, they will ONLY be able to take what I put on the card, instead of EVERYTHING like in my Credit Union. I am safer shopping online with her card than my bank card. That's common sense.

Personally I believe most people don't like her because that don't like "Standing in the Truth" because it's hard to do.... I get it. But you'll be better for doing it.

Now, I have question... Who else is really stepping up to help America? Really... NO ONE! I can only think of TWO others. Let's not beat up Suze Orman for trying to help us. If you don't agree with her style that's fine but at least try & express it in a way that builds everyone up.

By the way, I believe what everyone here and the community coordinator failed to see and point out is that SUZE ORMAN has more to lose by having this card then we do!

#ThankYouSuze

Guest's picture
Carrie

I am a big fan of Suze Orman but this card fell seriously short for me. I don't really see how it's better than any other prepaid card and would not sign up for it myself. Her demeanor with the commenters really disappointed me too.

I will say that I admire her efforts to get credit scores to reflect responsible spending and saving vs. using credit to spend money you don't have. She has really put herself out there for this fight and lots of financial institutions have big stakes in seeing her fail. Overall I still love her.

Guest's picture
John MWD

Just shows that everyone has buttons that can be pushed, and the power of the insecurities of others.

Her reaction, in this case, tells us more than the promo materials ever would dare.

Guest's picture
Guest

no one is speaking on how important it is that this card has identity theft protection attached to it FOR LIFE! I mean come on thats gotta count for something right? How important is it to have identity theft protection???

Guest's picture
souljarette

I applied and used the card. I thought it was a good idea at the time. I just cancelled it. My name changed (got married) I applied for a card with my new name on it. Before I received it my old card had been cancelled. I had direct deposit and money on the card. Didn't find out it was cancelled until I was out of town trying to purchase gas. I was LIVID!! Then I call and ask them to reinstate the old card until I could get the new one and they told me they couldn't do that!!!! WTF??? THIS IS MY MONEY AND I CAN'T USE IT! That is just AWFUL CUSTOMER SERVICE on steroids! I immediately changed my direct deposit, moved my funds to my bank via bill payment and shut this crap doen!

Guest's picture
Guest

Souljarette, Sorry you were caught in that position, but it seems to me that this mishap was clearly your own fault. Why cancel your previous card BEFORE receiving the new card with your married name? And then, try to use it. To me, if you requsted a card be cancelled, it's cancelled. How do you cancel a card and then use it? Could you have just did a name change on the current card? You are understandably pissed but I don't think the blame is with the card company. Just my opinion.

Guest's picture
Chantel

@ Guest - Souljarette "just" cancelled it, meaning she cancelled it after all of this crap happened to her.. Of course it would be stupid to cancel a card and try to use it... She didn't do that! Re-read what Soljarette wrote. It'll make more sense now. :-)

Guest's picture
Karyl

Disappointed...I was rather upset to find that each time I use my Approved Card for salon services there is an additional charge, allegedly for a tip, that I did not approve. When I get service I pay tips in cash. When I called the Customer Service line to question the additional charges I was told I had to deal with the retailer and there was NOTHING could be done even though the receipts I signed DID NOT match the amount I was actually charged. Is this even legal???

Guest's picture
Guest

I am a huge fan of Suze and recently got this card. (2013) I did it because the website claimed you could put money on it from you bank account. It isn't until after you sign up that you find out this is no longer an option. The other two options are western union or direct deposit. So I activated the card and went to western union. They had no record of my account. So now I am stuck with DD as my only option and I refuse to do that. So I call to cancel my account and if you call on the phone you have to pay to speak to someone. So I sent a letter asking them to cancel my account and send me written confirmation. When they got my letter they sent me an email that said there was "suspicious activity" on my account and that I would have to call them. UGH! I expected more. This is the worst product ever.

Guest's picture
Guest

I know this post was from last year, but I'm so frustrated at the moment with The Approved Card. I have had the card since last year some time. The main reason I signed up for it...Member to member transfer of funds. I talked my ex into opening an acct so he could transfer child support money weekly for free instead of via Western Union for the crazy fees. He also is able to send me extra if needed anytime. For those who may comment, having it done via courts is not the point and long story. We live in different states now. Anyway, I also like the fact they txt me daily balance & when my card is used. Perfect for identity theft protection. So, now for the negatives which outweigh the positives:
1. Monthly fee
2. Charge you more fees if you need to call customer service more than once in a month.
3. There system has gone down more than once when I needed to pay for a completed service and it kept declining when there was plenty of money, so had to figure out how to pay.
4. Newly updated website doesn't appear to have the member to member transfer option now and when I tried to call the bank, the automated system wouldn't take all the numbers I was typing in and it kept hanging up. I can't even get through to speak with anyone.

So, now I have not gotten my child support and I'm unemployed and it's the only income I get at the moment. I'm ready to close my account, especially if they took away the main reason I opened the account. I do have a regular bank account that I will not ever close because they are the best....USAA.