paid-value cards en-US Swipe envy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/swipe-envy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Poster that says, &quot;Bad Credit? No Credit? Pay now so you can eat later&quot; with a picture of a paid-value card" title="Fast Food Poster" class="imagecache imagecache-250w" width="250" height="270" /></a> </div> </div> </div> <p>All the cool kids have credit cards. What if you don&#39;t? What if you are so young, so poor, so uncool that you can&#39;t get one? Do you have to stoop to paying for your food with actual money? Not any more! These guys have the cure for swipe envy!</p> <p>Look at the poster in the picture. This fast food company (name slightly obscured) is marketing their paid-value card to people who can&#39;t get a credit card, but wish they had one <strong>so bad</strong> that they&#39;ll settle for a paid-value card that kinda looks like a credit card.</p> <p>Of course, I understand the attraction <em>to the merchant</em> of a paid-value card. They&#39;ve already got your money, so they&#39;re pretty sure you&#39;re going to buy stuff from them. (And, if you don&#39;t, that&#39;s okay too--see above where they&#39;ve already got your money.)</p> <p>From the point of view of the purchaser, a paid-value card is a dead loser:</p> <ul> <li>You take perfectly good money that you can spend anywhere, and turn it into non-money that you can only spend at one place.</li> <li>You miss out on the chance to earn interest until you spend it.</li> <li>Most paid value cards charge &quot;inactivity&quot; fees (and other fees) to make it easy for them to keep the money that you&#39;ve given them without having to provide any goods or services.</li> <li>You have no protection in the event the company declares bankruptcy (or, for that matter, in the event the company just decides that they&#39;d rather keep your money and not give you anything).</li> </ul> <p>Now, the disadvantages of a paid-value card are pretty obvious. The <strong>only</strong> reason I can imagine wanting to get one is if I was paying for someone else&#39;s food, and worried that if I provided cash, the guy would blow it all on something like bus fare or laundry. (Of course, it doesn&#39;t really work even for that. The guy who would really rather spend the money on something frivolous like textbooks can always find someone who wants food to buy the paid-value card, perhaps at a small discount.)</p> <p>I feel sorry for the guy who&#39;s so ashamed of not having a credit card that he&#39;d fall for a marketing ploy like this. It also offends me to see companies behave this way--I couldn&#39;t patronize a company that ran an ad like this. I expect, though, as the credit squeeze makes credit a lot harder to come by (not just mortgages), we&#39;ll see more and more ads like this, marketing to the folks with swipe envy.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Philip Brewer</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">5 Financial Holidays I&#039;d Like to See</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">7 Money Leaks You Need to Plug</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Could you save money by subscribing to an addictive game?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">4 Brilliant Tips From &quot;Smart Mom, Rich Mom&quot;</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Meet Meg Favreau, Our Senior Editor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living cards credit card gift cards paid-value cards Sun, 23 Dec 2007 20:37:53 +0000 Philip Brewer 1533 at