paid-value cards http://www.wisebread.com/taxonomy/term/8373/all en-US Swipe envy http://www.wisebread.com/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="/files/fruganomics/imagecache/250w/blog-images/paid-value-card-poster.jpg" 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="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/swipe-envy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. 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